GOLD PRICE NEWS – The gold price rose $6.65 to $1,435.56 Wednesday morning as the price of gold climbed alongside the broader commodities complex. While the gold price modestly advanced, silver rallied $0.66 to $36.32 per ounce. Oil held firm as well, rising $0.48 to $105.50 per barrel.
Today’s strength in the gold price follows Tuesday’s small loss, as the price of gold dropped $3.11 to $1,428.91. The weakness in the gold price came as the U.S. dollar advanced against a basket of currencies. In spite of the decline, the gold price remains within 1.2% of its all-time record high of $1,445.70, reached on Monday.
Shares of gold producers and explorers followed the gold price lower on Tuesday. The AMEX Gold Bugs Index (HUI) slid 1.0% to 562.97. With today’s sell-off, the HUI extended its year-to-date loss to 1.8%. Notable decliners included HUI components Barrick Gold (ABX), Kinross Gold (KGC), and Randgold Resources (GOLD). ABX, KGC, and GOLD fell 1.4%, 1.6%, and 4.2%, respectively.
While the gold price reached another new all-time high this week, sentiment toward the yellow metal remains muted. David Rosenberg of Gluskin Sheff recently pointed out that according to the latest Commitment of Traders (COT) report released by the COMEX, net speculative long positions in gold are at 230,325. This figure is considerably below “the 280,000 level that coincided with the last three interim peaks” in the gold price.
Richard Russell echoed Rosenberg’s view on the tepid sentiment toward record gold prices. In a recent edition of Dow Theory Letters, the longest-running daily investment letter on the planet, Russell wrote that “There’s something magical, mysterious and rather beautiful about a primary bull market. The bull market in gold has been in effect for over ten years, and the mysterious part of it is the way the American people have both ignored it and damned it.”
Although many market pundits have provided more coverage of gold prices in recent years, the yellow remains substantially under-owned by investors. At just 2% of global financial assets, gold makes up little to no portion of most investors’ portfolios.
Russell, aged 86, went on to say that “I’ve lived through bull markets in housing, commodities, stocks, silver, land. But in all my life I’ve never seen anything like the current bull market in gold. As far as many investment experts and as far as most of the media is concerned, the great bull market in gold has been a non-event and an abomination.”
“So much the better for those of us who recognized the gold bull market for what it was and is,” Russell continued, “The gold bull market may be the biggest money-maker of the last two or three generations. I’ve written before that bull markets don’t die of old age. Bull markets die of over-speculation and over-participation and thus, in the end they die of exhaustion. I’ve said all along that this is the way the bull market in gold will ultimately die.”
