Mark O'Byrne's Blog

Gold is mostly unchanged as investors gear up for the US Fed chairman, Ben Bernanke’s speech tomorrow. Market participants are focussed again on the short term and the silly “will he, won't he?” debate re Bernanke at the Jackson Hole symposium.

Gold climbed $14.60 or 0.88% in New York yesterday and closed at $1,669.40. Silver surged to a high at $30.81 and finished with a gain of 2.28%. The precious metals have broken out this week with sharp gains being seen in all four precious metals.

Platinum has gained 5.7 percent to $1,557.95 an ounce so far this week, heading for its biggest weekly advance since the five days through Jan. 13.

Gold continued gains on Friday receiving a boost from Angela Merkel’s comments saying she supported ‘Super’ Mario Draghi’s pledge “to do whatever it takes” to save the euro.

Soros' recent renewed allocation to gold has been far less trumpeted than his gold 'bubble' remark and much trumpeted liquidation of gold holdings in May 2011. Some have suggested that Soros was misinterpreted regarding his gold bubble remark and may have meant that gold will in time become the "ultimate bubble".

The Financial Times published an interesting article on Wednesday by a Tokyo-based analyst with Arcus Research, Peter Tasker, entitled of 'Cash out of gold and send kids to college'. The article is interesting as it is an articulate synopsis of those who are either negative on and or bearish on gold.

Recent dollar strength and a lack of clarity in the minds of many market participants regarding whether the ECB or the US Federal Reserve Bank will employ more quantitative easing to prevent double dip recessions and even depressions may be partly to blame for gold’s lack of gains recently.

The sharp losses in the gold mining sector Friday and last week could presage further weakness today but the higher weekly closes for gold and silver were constructive from a technical perspective.

This latest price weakness is confusing many market participants and causing further jitters to some owners of gold. Our conversations with people in the industry and our own experience makes us confident that this is another paper driven sell off drive primarily by speculative, leverage interests on the COMEX.

Gold edged up $1.20 or 0.07% yesterday in New York and closed at $1,627.40/oz. Gold remained steady in Asia seeing gradual gains which continued in European trading.