Gold sank this week, but some market watchers are still positive about its prospects. Silver and copper also fell this week, as did oil.
The gold price remains down from its impressive February 11 high of $1,260.60 per ounce, but isn’t far off from last week‘s close of $1,226. As of 12:00 p.m. EST on Friday, the yellow metal was changing hands at $1,220.
Gold’s fall over the last couple of weeks may have some investors worried, but many market watchers believe the metal is doing just fine. Notably, Deutsche Bank (NYSE:DB) has come out in support of the metal, commenting Friday that investors should buy it as “insurance.”
“There are rising stresses in the global financial system; in particular the rising risk of a U.S. corporate default cycle and the risk of a sharp one-off renminbi devaluation due to the sharp increase in China’s capital outflows,” CNBC quotes the firm as saying. “Buying some gold as ‘insurance’ is warranted.”
And Deutsche Bank is far from the only entity in favor of gold. MarketWatch states that Bank of America Merrill Lynch has commented that “gold is the new black,” while Rosland Capital’s Jeffrey Nichols has emphasized that he sees gold rising to “record highs far above what most people today would dream reasonable or possible.”
Notably, even those who see further falls in the gold price believe that ultimately the metal’s future looks bright. In another article, MarketWatch quotes Michael Armbruster of Altavest as saying that while gold may yet fall back to the $1,180 mark, he “think[s] gold has made a significant bottom and that the longer-term trend has turned up. In other words … a pullback to $1,180 [could be] a buying opportunity.”
For its part, the silver price took a bit of a fall this week as well. While it remained comfortably above $15 per ounce last week and for much of this week, on Friday it took a fairly steep drop. As of 1:00 p.m. EST that day the white metal was trading at just $14.64.
On the base metals side, copper has also had a tougher time this week than it did last week. While three-month LME copper hit its highest point in about two weeks last Friday, midway through this week the metal was suffering a little — according to The Wall Street Journal, COMEX copper for March delivery closed down 0.5 percent, at $2.096 per pound, on Wednesday.
Finally, while oil prices saw strong gains early Friday, those increases were not to last. CNBC states that as of 2:01 p.m. EST on Friday, Brent crude futures were sitting at $35.24 per barrel, down from an earlier high of $37; similarly, US West Texas Intermediate crude futures were down at $33.03 after reaching $34.69.
Oil’s earlier gains came on the back of news of supply disruptions in Iran and Nigeria — pipeline outages in those countries have reportedly removed over 800,000 barrels of crude oil a day from the market for at least the next two weeks.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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