Gold has had a tough week. On Friday 23 October the precious metal fell to around 3,975 dollars per troy ounce, its lowest point in three months. According to investingLive, that took gold below the 4,000 dollar mark for the first time since mid July. Over the whole week it lost about 3.9 percent according to FXStreet, its steepest weekly drop since June.
Kitco and TradingEconomics both put Friday’s close just below 4,000 dollars, at around 3,995. On Monday morning gold edged back up. At 8.05 Belgian time Kitco quoted it at 4,007 dollars, 0.3 percent above Friday. TradingEconomics showed 4,008 dollars at the same moment. Over one month gold is down about 2.6 percent.
Why the gold price fell last week
The biggest push came from oil. With fresh tension in the Middle East, including reports of possible action against Iran and incidents around the Strait of Hormuz, US crude rose back above 100 dollars a barrel on Friday according to FXStreet. As early as Thursday we wrote about how gold dropped over 2 percent when oil went above 112 dollars.
Expensive oil makes everything more expensive and keeps inflation high. That gives the US central bank, the Fed, a reason to keep rates high or even raise them. FXStreet cites a 78 percent chance of a rate hike in December. The US ten year yield is around 5 percent, and the dollar stayed firm. For gold, which pays no interest, that is a headwind.
Something else played a role too. According to investingLive and FXStreet, some investors sold gold and silver to cover losses on shares, after a wave of selling in technology companies. When gold dropped below its familiar range of 4,100 to 4,200 dollars, further selling followed according to FXStreet.
The 4,000 dollar line
This is not the first time this year that gold has swung around this figure. In July we already wrote about gold falling below 4,000 dollars for the first time since November. Back then it recovered quickly. Nobody knows whether that will happen again.
According to FXStreet, the next levels to watch are 3,959 dollars, the low of 17 July, and 3,941 dollars, the lowest point this year. On the upside, a first hurdle sits at 4,100 dollars. Giovanni Staunovo, an analyst at the Swiss bank UBS, expects according to investingLive that gold may test 4,000 dollars again, but that long term buyers will form a firm floor around that level. That is an expectation, not a certainty.
Gold lost nearly 4 percent last week and briefly fell to 3,975 dollars. On Monday morning it was just above 4,000 again. The gold in your pieces stays the same. Have weight and fineness measured correctly and always ask for the price of the day.
What this means if you want to sell old gold
If you have a box of old rings, broken chains or a gold bracelet, their value is moving with the price these days. The gold itself does not change. An 18 carat ring always contains 750 thousandths of pure gold. The price only decides what that amount is worth on a given day.
Gold is well below its peak from early this year. The current level in euros is on our page with today’s gold price. How we determine the fineness of old jewellery and weigh it correctly is explained on our page about how to sell old gold.
Silver at its lowest in almost a year
Silver had an even harder time. According to investingLive, the white metal fell last week to its lowest point in almost a year. On Monday morning Kitco quoted silver at 53.72 dollars, TradingEconomics at 53.86 dollars. Over one month silver lost more than 11 percent according to TradingEconomics. The gold silver ratio stands at 74.6 according to Kitco: it takes almost 75 ounces of silver to buy one ounce of gold.
For silver cutlery, dishes and old coins the same applies as for gold. A spoon of 800 thousandths contains a fixed amount of pure silver. How we tell solid silver from silver plate is explained on our page about how to sell silver.
What matters this week
The Fed meets on Tuesday and Wednesday. The decision follows on Wednesday at 7 pm Belgian time. According to investingLive, the market expects rates to stay unchanged after the September hike. What the Fed says about December carries more weight than the decision itself. On Thursday comes the PCE, the inflation measure the Fed watches most closely. And the oil price remains the big unknown.