Gold Rebounds Alongside Euro, U.S. Markets Advance

Gold futures bounced back from earlier losses on Friday morning, with the COMEX December 2011 contract climbing from an overnight low of $1,675.40 to $1,697.30 per ounce.

The rebound in gold futures coincided with a turn higher in the broader commodities complex and the euro as the U.S. dollar weakened against a basket of the world’s leading currencies. Silver futures climbed from an overnight low of $31.01 to $31.77 per ounce this morning, while crude oil jumped from $94.99 to $96.82 per barrel.

The euro currency fell to a multi-week low of 1.3214 against the dollar this morning, but rebounded toward the 1.33 level as the greenback retreated.  European equity markets were higher across the board on Friday, following steep losses on Thursday amid disappointment that a meeting between German, French and Italian officials offered no concrete plans to better combat the euro zone sovereign debt crisis.

German Chancellor Angela Merkel poured cold water on those calling for the issuance of euro bonds, while French President Nicolas Sarkozy noted that policymakers agreed not to put further pressure on the European Central Bank (ECB) to expand their purchases of sovereign debt.

U.S. equity markets – which were closed on Thursday for the Thanksgiving holiday – posted solid gains Friday morning, with the Dow Jones Industrial Average (DJIA) up 100.40 points, or 0.9%, at 11,357.94 and the S&P 500 Index up 10.48 points, or 0.9%, at 1,172.27.  S&P 500 futures had fallen to as low as 1,147.50 in overnight trading, but bounced back alongside European markets as risk aversion subsided.

Gold and silver stocks opened lower but jumped back modestly into positive territory, as the Philadelphia Gold & Silver Index (XAU) rose 0.3% to 190.26.  Among gold producers, AngloGold Ashanti (AU) and Harmony Gold (HMY) were the XAU’s two top performers – with gains of 1.1% and 1.0%, respectively.  Pan American Silver (PAAS) and Silver Standard Resources (SSRI), two of the XAU’s three silver components, posted gains of 0.9% and 1.7%, respectively.