GOLD PRICE NEWS – The gold price held steady near $1,780 per ounce Thursday morning despite better than expected data on the state of the U.S. labor market. The price of gold climbed to $1,787 prior to the release of weekly jobless claims, but relinquished its gains after they came in at a four-year low of 351,000. In doing so, jobless claims beat the 355,000 consensus estimate among economists and fell to their lowest level since March 2008. Notwithstanding the encouraging report, European equity markets remained modestly lower and S&P 500 futures dipped 0.1% to 1,354.50.
On Wednesday the gold price rose $19.66, or 1.1%, to $1,779.46 per ounce as precious metals reversed course following earlier losses. The price of gold hovered near $1,755 in morning trading, but turned sharply higher amid heavy volume on the COMEX. Gold futures later reached $1,783.40 in electronic trading, their highest level in over three months.
Silver bounced back alongside the gold price yesterday, climbing from an intra-day low of $33.82 to as high as $34.60 per ounce. In doing so, silver stretched its year-to-date gain to 24.4%. For comparison purposes, the price of gold has posted a very respectable – but far less – 13.8% return this year.
Gold shares were propelled higher by the gold price as well on Wednesday, as the Market Vectors Gold Miners ETF (GDX) added $1.01, or 1.8%, to $56.83 per share. With its advance, the GDX extended its gain in 2012 to 10.5%. Notable gold miners moving higher included Eldorado Gold (EGO), Goldcorp (GG), and IAMGOLD (IAG). EGO finished up by 2.6% at $14.77, GG by 1.5% at $49.20, and IAG by 3.1% at $17.36 per share.
The gold price displayed a considerable amount of resiliency yesterday in the face of a stronger U.S. dollar. While the yellow metal has displayed a strong negative correlation to the greenback in recent months, on Wednesday each asset class served as a safe haven amid modest weakness in the broader financial markets. The Dow Jones Industrial Average and S&P 500 Index each snapped three-session winning streaks by falling 0.2% and 0.3%, respectively.
Concerns over the effectiveness over the latest round of Greek bailout funds drove investors into the gold price and U.S. dollar. In a note to clients, analysts at HSBC stated that “Even assuming the new Greek programme proceeds as planned, the Greek government crisis is far from over. This deal will help creditors to be repaid, as the funds will be channelled into an escrow account to ensure that lenders are prioritized, but it will not revive economic growth any time soon.”
HSBC went on to say that “With the Greek economy now in its fifth year of recession and already having contracted in the fourth quarter by 7% year-on-year, even the revised debt sustainability analysis looks optimistic.”
Another factor underpinning the gold price rally was bullish commentary from Goldman Sachs. In a report published on Wednesday, the firm reiterated his $1,940 target by the end of the year. Analysts led by Jeff Currie wrote that “We expect US real interest rates to remain lower for longer given our US economics team’s expectation for US economic growth to remain slow through 2012. Consequently, we expect gold prices to continue to rise through 2012, reaching $1,940 an ounce in 12 months, and we continue to recommend a long gold position.”
Source; http://www.goldalert.com/2012/02/gold-price-steady-u-s-jobless-claims-hit-4-year-low/
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