GOLD PRICE NEWS – The gold price surged to a new record high Friday morning, touching $1,541 per ounce before settling back at $1,538. Strength in the price of gold continues to be driven by the sinking U.S. dollar, which fell against the euro, pound, and Canadian dollar this morning. Silver followed the gold price higher, rising nearly 1% to $48.80 per ounce. Commodities were strong across the board with oil and agricultural products leading the way. Inflation beneficiaries such as gold and silver have seen massive investment inflows as investors worry that Fed Chairman Bernanke is sacrificing the U.S. dollar in order to engineer a recovery in the U.S.
On Thursday, the gold price jumped to $1,538.80, the latest in a series of new all-time highs for the yellow metal. The gold price extended its monthly and year-to-date gains to 6.9% and 8.3%, respectively. The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, finished at a new record high of $149.82 per ounce.
Silver climbed in concert with the gold price, as it approached $50 per ounce for the second time this week. Yesterday, the price of silver hit an intra-day high of $49.56, before paring its gains and settling at $48.66 per ounce. Nevertheless, silver has continued to outperform gold and nearly all other commodities in 2011, with a year-to-date gain of 57.3%.
Is the gold price rally set to pause? It could, according to Steven Scacalossi, Director at TD Commodities, who noted this morning that, “Gold continues to ebb higher towards 1540. While we maintain gold will eventually test 1580-1600 it seems practical to assume a correction towards 1510-1520 support is likely enabling the market to consolidate.”
Gold and silver equities lagged precious metals on Thursday, with the Philadelphia Gold & Silver Index (XAU) sliding 0.7% to 220.39. Year-to-date the XAU is lower by 2.7%, highlighted by declines of 4.4% and 4.0% for Barrick Gold (ABX) and Newmont Mining (NEM), respectively. Other XAU components to post even larger losses in 2011 include Agnico-Eagle Mines (AEM) and Kinross Gold (KGC), which have tumbled 11.7% and 17.0%, respectively. Gold mining stocks moved higher alongside the gold price heading into Friday’s opening bell on Wall Street.
Thursday’s gold price rally and U.S. dollar sell-off were fueled by two worse than expected economic reports. First quarter GDP grew 1.8%, below the 2.0% the market was expecting, while weekly jobless claims rose to 429,000, below the 390,000 consensus estimate among economists. The disappointing macroeconomic data helped reinforce the views expressed by the Federal Reserve and Chairman Ben Bernanke this week that the U.S. economic recovery remains tenuous and continues to require an ultra-dovish stance from the central bank.
Commenting on the Fed’s outlook, Michael Gapen, an analyst with Barclays Capital Research, provided an encouraging forecast for those holding investments tied to the gold price. In a note to clients, Gapen wrote that “Altogether, the statement, press conference, and updated set of economic projections tell us that the Fed will likely be patient when it comes to the eventual removal of policy accommodation. We do not expect an increase in the federal funds rate until July 2012.”
Alacer Gold (ASR.TSX) announced first quarter 2011 operating results at its four mines in Australia and Turkey. The company was created out of a merger of equals between Anatolia Minerals and Avoca Resources that was completed on February 18, 2011. This new intermediate gold producer controls a portfolio of large, long-lived operating mines, has strong production growth and attractive exploration prospects.
In March 2011, the first full month of combined production, Alacer Gold produced 37,040 gold ounces. This represents an annualized rate of more than 440,000 gold ounces, which is well above the company’s 2011 target annualized production rate of 400,000 ounces. Shares of Alacer have gained 35% thus far in 2011. Read the Full Press Release.
* Total gold production during the quarter came in at 91,259 ounces, while gold reserves increased to 5.7 million contained ounces.
* Alacer is on pace to exceed 2011 gold production guidance.
* The prefeasibility study announced for Çöpler sulfide ore increased the company’s gold reserve base.
