May 19 was a big day for gold prices worldwide - perhaps the biggest this year. On that day the powerful European central banks announced the signing of the fourth Central Bank Gold Agreement. While that may sound harmless, it’s anything but.
Watch for the gold spot price - the price of gold for immediate delivery - to make dramatic moves as the Federal Open Market Committee (FOMC) meets this week.
It has already had a volatile morning ahead of the meeting's Tuesday kickoff.
Gold prices have notched a 7% rise year to date as of late July, but the yellow metal has had its fair share of ups and downs in 2014.
Gold mining stocks, on the other hand, have risen higher, and posted some eye-popping returns for investors.
The Dow Jones Industrial Average was hammered on Thursday and the S&P Volatility Index soared after a Malaysian Airlines plane crashed in a Ukrainian war zone on suspicions it was struck by a missile. In addition, multiple big name brands slumped heavily after failing to meet second-quarter earnings expectations.
Commodity prices in gold, oil, and agriculture saw strong gains as investors fled to hard assets.
The price of gold today skyrocketed when news of more geopolitical tension hit headlines. The safe-haven investment tends to enjoy gains when fear is in the air.
After a disappointing 2013, commodities prices came roaring back, with returns for the first half of 2014 outperforming the S&P 500 by more than 4% and 10-year Treasury bonds by more than 6%.
With money flowing back into commodities, the market is finally trying to reverse the downtrend that we've been up against since 2011.
Gold for August delivery, the most actively traded contract, rose $4.50, or 0.3%, to $1,310.60 an ounce in morning trading. Spot gold gained $2.70 to $1,310.
Gold prices today (Monday) fell sharply by 2.3% for the biggest one-day drop of 2014.
U.S. gold futures for August delivery were down $30.70 at $1,306.70 an ounce - their biggest one-day drop since December. Spot gold fell $33.50 at $1,305.50 an ounce. The sell-off happened quickly following the Comex futures market open in early U.S. trading according to Kitco, suggesting a big sell order hit the futures market at that time.
The landscape of the gold market has been changing dramatically in the last decade in terms of the dominant gold-producing nations. For example, for nearly a century, South Africa held the top spot for gold production. But in 2008, China took over, and since then, South Africa has sunk down to the fifth spot.
Gold prices spiked today (Thursday), hitting a near four-month high in early trading. In the morning session, August Comex gold soared $20.20 to $1,355.50 an ounce, its highest level since March 19. Spot gold jumped $17.10 at $1,344.25.
Gold prices today (Wednesday) finished back over $1,320 an ounce after the release of the latest U.S. Federal Reserve minutes, and amidst turmoil in the Middle East.
The price of gold fell Thursday after stronger-than-expected jobs data showed that U.S. economy added another 288,000 jobs in June. Also weighing on the precious metal was a drop in the official unemployment rate to 6.1% - its lowest level since September 2008 - and the Dow Jones breaking through 17,000 points to set a new high.
Gold stocks are poised for an upswing.
Just recently, the European Central Bank (ECB) announced a new policy to promote lending and, ultimately, inflation in the Eurozone. The move sent investors flocking to precious metals like gold and silver. And a recent election in April saw the seating of a new government in India. On account of the platforms of these new leaders, the Indian press has indicated to expect a considerable decrease in import duties.
The current gold price as of July 1 represents a three-month high amid a weaker dollar and ongoing geopolitical tensions.