After bottoming at $870 at the open of London trading yesterday, gold finally decided it was time to add some value, and it moved slowly but steadily higher from there to the close of the NYMEX, after which it leveled off and cruised into a finish at $886.10/oz., up $8.80. For the week, gold gave up 4.1%.

Platinum rose in Europe, but then traded dead flat through the whole New York day, ending at $2006/oz., up $7. For the week, platinum shed 7.6%.

Like gold, silver bottomed at the London open and rallied through the NYMEX, then traded flat to close at $16.87/oz., up 27 cents. For the week, silver plunged 7.3%.
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It was a bit of a relief for the precious metals fanciers, as the objects of their affection ended a dismal week on an up note.

The metals got a boost from the usual suspects, albeit a small one, as the euro inched higher against the dollar and oil rebounded to claw its way higher.

Some analysts were attributing Friday’s gold action to a technical bounce, but others were of the mind that that the improved macro economic outlook could have generated a bit of bottom fishing. The day’s data, while mildly positive, was not good enough to send the dollar markedly higher and slam gold again.

However, the week’s oil price volatility does leave some nagging questions to overhang the gold market heading into Monday’s trading.

Noting that yes, there was “a sharp sell off due to profit taking, dollar strength and oil weakness,” Mark O’Byrne, of Gold and Silver Investments Ltd., went on to write that, “these would seem to be short-term phenomena and the primary trends in oil and the dollar remain up and down, respectively, which should result in gold being well supported above $850 per ounce.”

O’Byrne concluded by saying that, “Inflation and stagflation are now stalking developed western economies and developing and emerging markets alike — and this bodes well for gold in the long term as it was in the 1970s.”

Meanwhile, silver remained in the lower segment of its May price range as copper, which it often follows, continues to struggle. Analysts remain concerned about the delicate balance engendered by the slowing economy.

On the one hand, the slowdown will keep a lid on the dollar, which is positive for all precious metals, but on the other, if the slump is too deep or prolonged, silver, as an industrial metal, will suffer.

Source: Gold, Silver End Week on an Up Note - Bounce May Have Been Technical, Tho.