GOLD PRICE NEWS – The gold price held steady near $1,655 per ounce Tuesday morning as euro zone sovereign debt concerns continued to be at the forefront of financial headlines. The price of gold climbed to as high as $1,665.40 in overnight trading, but pared its gains as the U.S. dollar rebounded against a basket of foreign currencies. The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, traded near unchanged at $161.01 per share.
Gold equities moved lower early Tuesday with the Market Vectors Gold Miners ETF (GDX) dropping 1.4% to $55.23 per share. Barrick Gold (ABX), the world’s largest gold company, declined 0.8% to $45.93 per share. Newmont Mining (NEM), the largest U.S.-based gold producer and the only gold miner included in the S&P 500, dipped 1.4% to $62.96 per share.
U.S. financial markets fell steeply at the open as S&P 500 futures slid 2.25 points at 1,244.75. Futures were considerably higher earlier this morning, but headed south following a worse than expected report on the U.S. housing market. The S&P/Case-Shiller Housing Price Index fell 3.8% year over year in August. The disappointing report confirmed comments made yesterday by Federal Reserve President William Dudley that the housing market continues to be a significant drag on the U.S. economy.
In Europe, equity markets in France and England were considerably lower, while the German Dax rose 0.3%. The euro currency initially rallied against the U.S. dollar in overnight trading, reaching 1.3959, but relinquished its gains as the opening of U.S. equity markets approached.
A six-day set of meetings among European policymakers continued on Tuesday amid significant doubts that a more robust plan to combat the sovereign debt crisis can be developed. Officials in Germany and France continue to discuss potentially leveraging the European Financial Stability Fund (EFSF), as well as developing plans to recapitalize the European banking system. However, no concrete plans have yet to be announced.
Commenting on the outlook for the gold price, analyst at Commerzbank wrote in a note to clients that “The yellow metal is showing little independence at the moment and still moving in line with commodities and equity markets, albeit underperforming. We therefore do not expect any great price swings either in the wake of the EU summit on Wednesday.”
Commerzbank went on to say that “Should a solution to the debt crisis be presented, gold will probably be pulled up slightly. Should expectations be disappointed, its character as a safe haven is likely to limit the downside potential.”
Alacer Gold Increases South Kalgoorlie Reserves by 96%
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