Market Recap 8/6/10

At the risk of sounding like a broken record, the U.S. Stock Market continued its roller coaster ride this week. The U.S. Dollar fell to a three-month low against a basket of currencies according to Reuters. The Wall Street Journal reported on Tuesday the Fed may consider pumping more money into the system by purchasing new mortgage or Treasury debt, which may be further confirmation that the recovery is stalling out once again.

Reuters reported that China, the world’s top producer and number two consumer of gold, moved to make trading the yellow metal easier this week. China’s Central Bank stated it will allow its banks to import and export more gold as part of a program to push forward the development of the country’s market in the precious metal. In response, UBS analyst Edel Tully said, “This is largely positive news for gold as it looks like an effort to further liberalize the gold market and integrate it into China’s financial framework.”

The Houston Chronicle recently reported that the University of Texas Investment Management Company (UTIMCO) invested $500 million in gold. Although this sum only accounts for a reported 3% of UTIMCO’s portfolio, the move has caught the attention of savvy investors across the nation. Actions such as these continue to point out that the financial crisis and unstable economy can highlight the appeal of gold and could push prices to new highs in a very short time.

Gold again reached the $1,200.00 mark late in the week, as government data showed a larger-than-expected loss of 131,000 jobs in July, which is more than twice the number expected by economists. Weak job reports combined with recent fears of a stalling economic recovery lend appeal to precious metals as an alternative investment to hedge against inflation.

Spot gold prices opened this week at $1,181.50. The high during the week was on Friday, August 6th, at $1,213.30, while the low for the week occurred on Monday, August 2nd, at $1,176.70. Gold ended the week up $24.50 at $1,206.00. This week 2010 1 oz. Gold American Eagles, 1 oz. Gold Maple Leafs and 1 gram Sunshine Minting Gold Bars were popular gold products.

Spot silver prices opened this week at $18.03. Silver reached a high of $18.70 on Wednesday, August 4th, while this week’s low for silver occurred on Monday, August 2nd, at $17.98. Silver ended the week up $0.46 at $18.49. The most popular silver products this week were 2010 Silver American Eagles, 1 oz. Silver Buffalo Rounds and 1 oz. APMEX Silver Rounds.

Spot platinum prices opened this week at $1,573.80 and ended the week up $1.20 at $1,575.00. 1 oz. Pamp Suisse Platinum Bars, 1 oz. Platinum American Eagles and 1/2 oz. Platinum American Eagles were popular this week.

Spot palladium prices opened this week at $503.00 and ended the week down $12.40 at $490.60. 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs remain very popular.

Featured Bullion Product:
Each week, APMEX will review a different bullion product for the benefit of our readers. This week, we will review British Gold Sovereign coins.

First minted in 1489 for King Henry VII of England, the Gold Sovereign has become a symbol of the strength and wealth of the British Empire the world over. Production of these classic gold bullion coins continues today. With occasional exceptions, the design of the Gold Sovereign has consistently been the classic St. George Slaying the Dragon sculpted by Benedetto Pistrucci. This gold coin has been the world standard for the consistency and purity of its gold and for the accuracy of its weight for hundreds of years. Each Sovereign contains .2354 ounces of pure gold while the smaller half sovereign contains .1177 ounces of pure gold.

Because of the size of the former British Empire, Gold Sovereign coins have been struck in Great Britain, Canada, Australia, South Africa, India and the Isle of Man. Other countries have struck gold to a standard size and weight that matches this handsome gold coin. In many ways, the Gold Sovereign set the standard for gold world coinage.