GOLD PRICE NEWS – The price of gold recouped its earlier losses on Tuesday, rebounding alongside the broader financial markets as the U.S. dollar pared its gains. The spot gold price fell to an intra-day low of $1,717.79 per ounce this morning, but bounced back toward unchanged at $1,728.65. In doing so, gold prices looked to remain in consolidation mode near the $1,730 level for the third consecutive trading day.
Silver followed a similar path to the gold price this morning, as it initially dropped $0.32, or 1.0%, to $32.10 per ounce but soon after climbed into the black at $32.62. In doing so, silver returned to positive territory on a month-to-date basis, by 1.0%, while the price of gold remains up by 0.4% thus far in November.
Gold stocks opened lower in conjunction with the price of gold, as the Market Vectors Gold Miners ETF (GDX) slid by as much as $0.79, or 1.6%, to $49.25 per share. However, the GDX continued to lag the yellow metal as it was only able to recapture approximately half of its earlier decline, remaining down by $0.40, or 0.8%, at $49.64 per share.
Notable gold stocks heading south on Tuesday included Barrick Gold (ABX) and Goldcorp (GG), the two largest components of the GDX. Shares of ABX fell by 1.6% to $35.32 and GG by 1.2% to $42.87. Newmont Mining (NEM) – the GDX’s third largest holding and the only gold stock included in the S&P 500 Index – declined by 0.9% to $47.29 per share.
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The broader equity markets fared better than the gold sector, as the S&P 500 quickly rebounded to 1,383.55 after initially dropping to 1,371.39 – its lowest level since August 3rd. Across the Atlantic, financial markets in Europe oscillated between gains and losses. The German DAX retreated by 0.3% to 7,146.23 while the French CAC inched up by 0.1% to 3,413.98. As for the euro currency, it held near unchanged at 1.2712 against the U.S. dollar.
Gold prices also received some support on Tuesday from a disappointing report on the state of Germany’s economy. The ZEW expectations index, a closely-followed measure of investor sentiment, unexpectedly fell from minus 11.5 in October to negative 15.7 in November – well below the negative 10.0 consensus estimate among economists.
Wolfgang Franz, ZEW President, noted that “Prevailing recessionary developments in the euro zone impact the German economy via foreign trade and a lack of confidence. This is likely to be a burden for economic growth in Germany during the next six months.”
Franz echoed comments made last week by Mario Draghi, the European Central Bank (ECB) President, who rattled financial markets by stating that the ongoing sovereign debt crisis has begun to more significantly impact the Germany economy. Following Draghi’s remarks, equity markets across Europe and the U.S. sold off while the gold price jumped to a three-week high of $1,739.37 per ounce.