GOLD PRICE NEWS – The gold price traded near unchanged Friday, hovering near $1,780 per ounce. The spot price of gold climbed to $1,789.10 – the highest level since November 11, 2011 – during yesterday’s session, but pared its gains as short-term traders took profits in the yellow metal. With its slight advance, the gold price extended its weekly and year-to-date gains to 3.4% and 13.8%, respectively.
While the gold price held near unchanged yesterday, silver continued its ascent. The price of silver jumped $0.94, or 2.7%, to $35.42 per ounce amid widespread strength in commodities and weakness in the U.S. dollar. Thus far in 2012, silver has now surged 27.8%, making it one of the best performing asset classes this year.
Another standout performer in the commodities complex was crude oil, which rallied to a nine-month high above $108 per barrel as geopolitical tensions in Iran provided a solid underpinning. Nikos Kavalis, a strategist at Royal Bank of Scotland, noted in a report that “The fact that we have Iran in the background is certainly helping through higher oil prices, which are a negative for most other industrial commodities. But for gold, it’s positive as it boosts inflation-hedging and boosts its safe-haven attributes.”
Gold shares marched higher as well on Thursday, in spite of the stability in the price of gold. The Market Vectors Gold Miners ETF (GDX) rose $0.43, or 0.8%, to $57.26 per share, its best closing level since December 9, 2011. Furthermore, the GDX stretched its gain in 2012 to 11.3%. Notable advancers yesterday included Newmont Mining (NEM), Randgold Resources (GOLD), and Yamana Gold (AUY). NEM finished higher by 1.6% at $63.80, GOLD by 1.9% at $116.88, and AUY by 3.2% at $17.93 per share.
Commenting on the consolidation in the gold price, Saxo Bank’s Ole Hansen wrote in a note to clients that “(We had) technical buying yesterday with a lack of follow-through today despite support from weaker dollar.” Hansen added that “I wouldn’t be surprised to find that the market wants to check the conviction of those recent initiated longs here.”
In contrast to Saxo Bank, analysts at TD Securities remained more positive on the short-term outlook for the price of gold. “After yesterday’s nice move higher in gold, taking out buy stops at $1763 resistance, we have been flirting with $1780. London saw $1781 briefly on its open but we’ve since moved slightly lower. The EUR is higher, base metals are mixed, and oil is holding recent gains. Overall we remain positive to gold with the next target being $1,803 in the short term.”