GOLD PRICE NEWS – The gold price held firm near $1,620 per ounce Thursday morning despite encouraging economic news in the U.S. and Europe. While the price of gold stabilized, silver rallied $0.31, or 1.0%, to $30.27 per ounce. U.S. equity markets looked to open substantially higher, with S&P 500 futures up 15.00 points, or 1.3%, at 1,164.00.
Weekly jobless claims in the U.S. fell 37,000 to a seasonally-adjusted 391,000, the lowest level since April 2 and below the consensus estimate among economists. GDP was revised up from 1.0% to 1.3%, above the 1.2% expected by economists. In Germany, the lower house of parliament voted to expand the size of the European Financial Stability Fund (EFSF), and the upper house is expected to pass the measure on Friday.
The gold price stabilized this morning after dropping $41.00, or 2.5%, to $1,609.15 per ounce on Wednesday as precious metals’ weakness resumed and the U.S. dollar rallied. The spot price of gold held steady near $1,650 for most of the morning, but plunged to an intra-day low of $1,597.80 as renewed liquidation engulfed the yellow metal. With the decline, the gold price extended its loss in September to 11.9%. In doing so, the price of gold is now on pace for its worst month since it plummeted 17.4% in October 2008.
Silver tumbled alongside the gold price yesterday, but once again posted a far greater loss than the yellow metal. The spot price of silver retreated $1.93, or 6.1%, to $29.96 per ounce. The iShares Silver Trust (SLV), a proxy for the silver price and the world’s largest silver ETF, finished lower by $2.30, or 7.4%, at $28.87 per share. On a month-to-date basis, silver has now fallen 27.9%, its worst month since a 28.4% drop – also in October 2008 during the depths of the financial crisis.
The decline in the gold price pressured gold equities, as the AMEX Gold Bugs Index (HUI) sunk 4.4% to 520.09. With the drop, the HUI – comprised of many of the world’s largest gold producers – fell to its lowest level since July 1. Barrick Gold (ABX) and Goldcorp (GG), the sector’s two largest companies, slid 3.7% and 3.9%, respectively. Newmont Mining (NEM), the largest U.S.-based gold miner and the only gold stock included in the S&P 500, retreated 3.0%.
Commenting on Wednesday’s gold price sell-off, Standard Bank Plc analyst Marc Ground wrote in a note to clients that “Momentum is lacking as investors adopt a seemingly cautious attitude to entering the gold market after last week’s abrupt price fall.”
Part of yesterday’s move lower in the gold price was fueled by a rare bit of encouraging news in the euro zone. The European Parliament voted yesterday to more automatically enforce sanctions against euro zone nations that do not adhere to deficit and debt limits. The stricter regulations will accompany the European policymakers’ more pressing goal of preventing concerns of a Greek default from further damaging the financial condition of Italy, Portugal, and Spain.
Premier Gold Hits High-Grade at Trans-Canada
The PEA will consider several possible options available to Premier in assessing how best to optimize key assets in the Trans-Canada Project – including the Hardrock, Brookbank, Key Lake and Kailey Deposits. The JDS team of experienced mining professionals will augment Premier's exploration expertise to provide, in 2012, a clear economic framework and vision to advance the project toward development. Full Premier Gold Mines Press Release.
- Initial follow-up drilling returned some of the highest recorded assays, resulting in multiple ounce intercepts in several of the target areas.
- The Trans-Canada Project is host to several past-producing mines which collectively produced more than 4 million ounces of gold from depths within 600 meters of surface between 1938 and 1968.
- The Hardrock Deposit is host to a NI43-101 compliant mineral resource estimate that includes 3.6 million gold resources.
