This is another one of those odd trading days where prices are higher than yesterday but technically down. Unless we get a monster late rally, it looks like we’re going to see a loss this week. Any big price moves have been to the downside and buying has not picked up the slack.
Gold was down $0.70 to $1,603.20 and silver was up a penny to $27.82, with the silver/gold ratio ticking to 57.6.
So what happened? Why did the price of gold slide during a week when we should have seen prices drift higher? Turns out there are several factors feeding the August doldrums this year.
The dollar is the main factor pushing metals prices around in low volume markets. The dollar has been edging up against major currencies all week, which creates headwinds for gold and silver. Gold has managed to beat the currency adjustment most days, but not enough to stay in positive territory.
Even though central banks have added to their gold reserves, soft jewelry demand from India more than countered that difference. Jewelry demand in India is off over 30 percent from last year, and recycled gold supplies dropped 7.7 percent in just the first three months of the year.