Comex gold futures shot up 1.97% to $1,670.60 on Thursday, up 3.3% so far this week. Gold futures broke their 200-day moving average on Aug. 21, a bullish signal. The precious metals block performed very well this week, with silver futures up 8.7% to $30.542, and the platinum futures up 4.91% to $1,554.90, owing to the mine violence and strikes in South Africa. The CRB Commodities Index also rose 1.24% this week. However, the S&P 500 Index has fallen 1.13% by Thursday, the Stoxx 50 has declined 1.71% while the Emerging Markets Equities Index has dropped 0.31%.
The gold price was ignited when the US Federal Reserve released its FOMC meeting minutes from the July 31 meeting, where many members favored monetary easing "fairly soon" unless the US sees a stronger recovery. The recent weaker US data, ranging from lower consumer confidence, and higher job claims than expected, as well as an unemployment rate stuck at 8.3%, are clearly of concern to the Fed, who seem to want to take more actions.
Elsewhere, the Eurozone Markit Economics PMI index contracted for the seventh consecutive month in August, while the July business confidence in Germany fell to a two-year trough. In China, the August preliminary HSBC PMI index dropped to 47.8 from 49.3 in July. Without the need to see more data, Charles Evans, the Federal Reserve Bank of Chicago President, urges central banks around the world, including China and the US, to conduct more monetary easing.
Bloomberg reported that gold ETP holdings surged 46.9 metric tons so far in August, and rose 85.5 tons in 2012 to reach 2,442.3 tons. Gold ETP holds the fourth largest gold reserves in the world, after the US, Germany and Italy.
With the momentum turning positive for gold, and the 14-day RSI breaching 70, some technical analysts worry that prices may dip. The gold price will continue to be impacted by expectations and the eventual realizations, or not, of QE3 from the Fed, or more monetary easing from China and Europe, which will fuel inflation.
Important upcoming data and events will include the US July durable goods new orders on Aug. 24, the Samaras-Merkel and Samaras-Hollande meetings on Aug. 24 and 25, Germany's August IFO on Aug. 27, and Fed Bernanke's speech at Jackson Hole on Aug. 31.