GOLD PRICE NEWS - The spot gold price on Friday slid under $1,140 per ounce, heading into the final day of the week. The price of gold has settled back under the $1,150 per ounce level it traded above two days ago. Gold futures on the COMEX, per the June contract, are nearly unchanged on the week at $1,137.80. Silver futures have similarly oscillated in a narrow range for most of the week, trading at $17.91 per ounce.
Developments in Greece continue to dominate the financial press as the nation struggles to roll over its debt obligations. This morning, Greek Prime Minister George Papandreou has asked that the rescue package be activated. Greek government debt yields are rising as the market awaits a comprehensive roadmap that contains meaningful austerity measures. The euro has steadily weakened as the market has increasingly questioned whether the aid package is anything more than a short-term band aid. The euro’s weakness has helped drive fund flows into the U.S. dollar, a fact that has helped keep a lid on gold prices.
Gold prices are near the top of their 2010 trading range awaiting a catalyst for a break out. Inflows into gold ETFs have tapered off a bit this week. The SPDR Gold Trust (GLD) currently holds 1,140 tons, or 36.65 million ounces - valued at 41.5 billion using the current spot gold price.
Gold stocks are up 1.5% this week as measured by the Market vectors Gold Miners ETF (GDX), however, the 2.4% gain in the GDX thus far in 2010 falls short of the 4.3% rise in the gold price. Investors have been disappointed in the performance of the large-cap gold stocks, which have failed to deliver on their objective of gold price leverage.
Next week earnings season for the gold mining producers kicks into high gear with Newmont Mining (NEM) set to report on Tuesday April 27, Barrick Gold (ABX) on Wednesday April 28, and Goldcorp (GG) on Thursday April 29. Earnings for the gold miners are expected to have a muted impact on their share prices as the 1% rise in the gold price in Q1 over Q4 was offset by higher input costs and stronger local currencies.
