January 5, 2013
Ranging across the marketplace, gold spent the week defying common wisdom and forcing the hands of crystal ball gazers all over the world. On Friday gold closed at $1,648, with silver walking alongside, closing down 2.8% at $29.32. These swings proved too much for paper gold, creating an illusion that the yellow metal was collapsing. Technical sell-offs caused many to scratch their heads as gold stayed above $1,600. The jobs report, a stronger dollar, and an announcement by the Fed that QE3 may end sooner than expected were used as explanation for the bearish bull. Something to watch, however, is the Indian government seeking to balance its trade deficit by raising taxes on imported gold. India is the world’s biggest buyer of gold. If these consumers are priced out of gold, what could we expect from silver? Only time will tell.