The gold price climbed $11.90, or 0.7%, to $1,654.89 per ounce on Friday as the commodities complex rebounded from yesterday’s losses. The price of gold hovered near unchanged at $1,645 in overnight trading, but turned higher amid U.S. dollar weakness this morning. Silver advanced alongside the gold price, by $0.31, or 1.0%, to $31.78 per ounce. U.S. equity markets opened near unchanged this morning, with the S&P 500 down 0.1% at 1,391.52.
On Thursday the gold price
continued its recent bout of weakness by falling $7.23, or 0.4%, to
$1,642.99 per ounce. The price of gold tumbled to $1,627.32 earlier in
the day, but pared its losses as the U.S. dollar retreated from its
intra-day high. With the decline, the gold price reached its lowest
level since January 13 and its year-to-date gain was reduced to 5.1%.
Silver fared considerably worse than the price of gold
yesterday, as it dropped 2.2% to $31.47 per ounce. Gold’s sister
precious metal hit an intra-day low of $31.10 – its worst level in nine
weeks – before also recouping a portion of its loss. Nonetheless,
silver remains higher by 13.5% in 2012 – making it one of the best
performing commodities this year.
Gold shares came under further
selling pressure in conjunction with the gold price on Thursday, with
the Market Vectors Gold Miners ETF (GDX) sliding 2.0% to $48.75 per
share. In doing so, the GDX fell to its lowest closing level since
August 11, 2010 and stretched its year-to-date loss to 5.2%. Notable
gold stocks moving lower included AngolGold Ashanti
(AU), Eldorado Gold (EGO), and Royal Gold (RGLD). AU slipped by 1.9%
to $37.15, EGO by 1.8% to $12.88, and RGLD by 1.2% to $63.20 per share.
the aforementioned companies posted noteworthy losses, the GDX’s worst
performer on Thursday was Randgold Resources (GOLD). Shares of GOLD
plummeted $12.80, or 12.4%, to $90.60 per share after a military coup
emerged and took control of the government in Mali – where Randgold has
its Loulo and Morila gold mines. Although the Company announced that
its operations in Mali were “running normally,” investors chose to shoot
first and ask questions later.
Yesterday’s gold price sell-off
occurred in the midst of widespread liquidation in financial markets.
The primary catalyst for the decline was the latest data on Chinese
manufacturing activity, which came in below economists’ estimates.
China’s preliminary Purchasing Managers’ Index (PMI) for March dropped
to 48.1 and marked its fifth consecutive month below the key 50 level
that separates expansion from contraction.
Following the disappointing Chinese data, the price of gold moved lower alongside commodities and stocks. Copper futures
retreated 1.9% to $3.77 per pound and crude oil sunk 1.6% to $105.51
per barrel. The Dow Jones Industrial Average slipped 0.6% to 13,046.14
while the S&P 500 Index fell 0.7% to 1,392.78.
recent gold price weakness, one noteworthy and long-time gold bull
reiterated his positive stance on the yellow metal. Philip Klapwijk,
Global Head of metals analytics at Thomson Reuters GRMS – the world’s
leading metals consultancy firm – urged investors to use the recent
sell-off to accumulate positions in gold.
Although the price of
gold could dip below $1,600 in the short-term, Klapwijk asserted, he
sees it rebounding to $2,000 per ounce either in late 2012 or early
2013. Klapwijk based his bullish gold price view on expectations that
real interest rates will remain negative for the foreseeable future and
that the Federal Reserve and/or European Central Bank could launch new
rounds of quantitative easing.
Let us know if you have gold to sell at valleygoldminesaltlake.com or 801.889.7200