GOLD PRICE NEWS – The gold price tumbled $15.32 to $1,528.81 Friday morning amid weakness in commodities and strength in the U.S. dollar. Silver fell alongside the gold price, by $0.66, or 1.8%, to $36.91 per ounce, while oil sunk 1.1% to $100.79 per barrel. The euro slid 0.3% to 1.4465 against the dollar as ongoing concerns over the Greek sovereign debt crisis weighed on the European currency. In Asia and Europe, equity markets were weighed down by a report on China’s trade surplus, which came in below expectations.
On Thursday the gold price stretched its streak of consecutive closes between $1,535 and $1,545 per ounce to ten. The advance in the price of gold came amid broad-based gains for commodities and equities, following six straight down days for the broader markets. The price of gold climbed to as high as $1,550.80 in morning trading, but pared its gains as the day progressed. The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, added $0.75, or 0.5%, at $150.56 per share.
Silver outperformed the gold price, jumping $0.72, or 2.0%, to $37.54 per ounce. Gold’s sister precious metal has now closed between $36.00 and $38.50 for the past 13 trading sessions, as it consolidates following its steep losses in early May. Year-to-date, the price of gold and silver have now gained 8.6% and 21.2%, respectively.
Gold and silver equities followed precious metals higher, with the Philadelphia Gold & Silver Index (XAU) climbing 3.08 points, or 1.6%, to 197.19. The strength in gold and silver shares was a welcome respite from the sector’s recent weakness. Coming into Thursday, the XAU was sitting at a 9-month low and had stretched its year-to-date loss above 14%. Top performers yesterday included Kinross Gold (KGC) and Randgold Resources (GOLD), with gains of 3.6% and 4.0%, respectively. Among silver shares, Hecla Mining (HL) and Silver Wheaton (SLW) rose 2.2% and 2.5%, respectively.
The price of gold and silver were boosted on Thursday by the latest batch of disappointing U.S. economic data. Weekly jobless claims rose to 437,000, above the 419,000 consensus estimate among economists. The latest figure marked the ninth consecutive week in which claims were north of 400,000, and reinforced Fed Chairman Bernanke’s comments this week that the pace of the economic recovery remains frustratingly slow.
Over in Europe, the European Central Bank (ECB) kept its benchmark interest rate unchanged at 1.25%, as expected. Following the meeting, ECB President Jean-Claude Trichet stated at his press conference that “On balance risks to the outlook for price stability are on the upside, accordingly strong vigilance is warranted. On the basis of our assessment we will act in a firm and timely manner.”
Trichet’s comments fueled speculation that the ECB may hike interest rates at its next meeting in July. However, despite Trichet’s hawkish stance, the euro currency slid 0.5% to 1.4466 against the U.S. dollar amid ongoing concerns over the sovereign debt crisis in Greece.
According to officials at the ECB, European Commission, and the International Monetary Fund (IMF), Greek efforts to stabilize its public finances and implement austerity measures have “ground to a halt” in the last quarter. Meanwhile, German Finance Minister Wolfgang Schaeuble and ECB President Trichet continue to quarrel over a potential debt restructuring for Greece.
Looking ahead, euro zone policymakers are scheduled to meet next week for renewed discussions on the Greek bailout. The outcome of the meeting may serve as a significant catalyst for the gold price, the euro, and the broader markets. Judging by continued stress in Greek financial markets, investors remain quite concerned with the prospects of any new bailout plan, which is likely to augur well for the price of gold.
