GOLD PRICE NEWS – The gold price oscillated above the $1,600 per ounce level Friday morning. At $1,608 per ounce, the price of gold is lower by $138 in December, a decline of 7.9%. Strength the U.S. dollar has pressured gold and investments tied to the gold price over the course of the month. Nevertheless, the yellow metal remains higher by 13% thus far in 2011 and is on pace to post its eleventh consecutive year of gains.
On Thursday, the gold price dropped $11.88, or 0.7%, to $1,605.01 per ounce as the yellow metal remained constrained by strength in the greenback. The spot price of gold initially climbed toward $1,620 per ounce in morning trading, but later retreated as the euro fell toward 1.350 against the dollar. The SPDR Gold Trust (GLD), the world’s largest gold ETF and proxy for the gold price, settled lower by $1.12 at $156.04 per share.
Silver declined yesterday in concert with the gold price, falling $0.21, or 0.7%, to $29.21 per ounce. Other precious metals were mixed, with platinum futures sliding 0.5% to $1,424.40 per ounce and palladium jumping 3.2% to $654.34 per ounce. Most cyclical commodities finished in the black, as crude oil advanced 0.9% to $99.53 per barrel and copper rose 0.6% to $3.42 per pound.
Gold stocks continued to slide alongside the price of gold, as the AMEX Gold Bugs Index (HUI) dropped 1.0% to 508.31. Barrick Gold (ABX), the world’s largest gold mining company, fell $0.39, or 0.8%, to $45.89 per share. Newmont Mining (NEM), the largest U.S.-based gold miner, retreated 3.0% to $61.01 per share. The sector’s sell-off stood in contrast to the broader equity markets – as the S&P 500 Index advanced 0.8% to a two-week high of 1,254.00. In doing so, the benchmark U.S. Index climbed to within a fraction of break-even territory on a year-to-date basis.
Looking ahead for the price of gold, VTB Capital analyst Andrey Kryuchenkov contended on Thursday that “We still see easing momentum for gold at the end of the month with small chance of physical buyers or longer-term investors returning before [the first quarter of 2012]. In the next few sessions, we expect to see some more volatility in thin pre-holiday trading.”
In a note to clients, the VTB Capital also wrote that “We still see little chance for gains here until year end. Gold will stall below short-term resistance at $1,620, in our view. The market failed to breach it yesterday, also having tested more resistance at $1,640 (earlier in the week).”
Eugen Weinberg, an analyst at Commerzbank, offered a similarly cautious near-term outlook on the gold price. ”People are not looking at gold as a safe haven, and that is one of the reasons for this lacklustre performance. I wouldn’t be surprised to see further weakness in gold prices going forward.”
Over the longer-term, however, Weinberg presented his more bullish stance on the price of gold. ”The price increase before was also due to speculative interest, and that seems to be abating, which I find healthy. Gold will be forming a bottom in the coming months, and due to the higher risks ahead, I think prices are likely to increase.”
Platinum Group Metals Moves Forward Toward Production
In August, Platinum Group Metals entered into a mandate letter with a consortium of financial institutions – including Barclays Capital and the Standard Bank of South Africa Limited – for a $260 million project finance loan to enhance the development of the Western Bushveld Joint Venture (WBJV) Project 1 Platinum Mine. Full Platinum Group Metals News Release.
- Preparation of detailed banking documents for the senior loan facility with the mandated syndicate of banks is ongoing
- The completion of this documentation, due diligence, hedging establishment and off take negotiations are expected to be completed during Q1 and Q2 of calendar 2012
- Project 1 is advancing towards a 275,000 ounce per year platinum, palladium, rhodium and gold planned production profile
- Full commercial construction is budgeted at $443 million and initial commercial production is scheduled for late 2013
