IBT: Gold Price Holds Near $1,645, Silver Inches Higher
GOLD PRICE NEWS – The gold price held near $1,645 per ounce Tuesday morning as the U.S. dollar stabilized against a basket of foreign currencies. The spot price of gold reached an overnight high of $1,655.43, but pared its gains as U.S. financial markets opened. The SPDR Gold Trust (GLD), the world’s most liquid gold price proxy, rose $0.41, or 0.3%, to $159.78 per share.
Silver inched higher alongside the gold price this morning, by $0.07, or 0.2%, to $31.62 per ounce. Gold’s sister precious metal climbed to $31.94 in overnight trading but also subsequently gave back most of its gains. The iShares Silver Trust (SLV), the world’s largest silver ETF, moved higher by $0.17, or 0.7%, to $30.76 per share.
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Gold shares hovered near the flatline in concert with the price of gold, as the Market Vectors Gold Miners ETF (GDX) traded near unchanged at $46.47 per share. Barrick Gold (ABX), the world’s largest gold mining company, rose $0.10 to $41.03 per share. Newmont Mining (NEM), the only gold stock included in the S&P 500 Index, advanced $0.09 to $48.09 per share.
The broader equity markets also showed little movement this morning, with the S&P 500 Index stabilizing near unchanged at 1,382.08. Yesterday, equities posted considerable losses, as the benchmark U.S. index dropped 1.1% and the CBOE Volatility Index (VIX) surged 12.6% to a one-month high of 18.81.
The gold price received a boost yesterday from Federal Reserve Chairman Ben Bernanke, who reiterates his cautious outlook on the state of the U.S. economy. Although the majority of his comments related to regulation of the financial industry, Bernanke noted at the 2012 Federal Reserve Bank of Atlanta Financial Markets Conference in Stone Mountain, Georgia that “About three and a half years have passed since the darkest days of the financial crisis, but our economy is still far from having fully recovered from its effects.”
Commentary from analysts at Morgan Stanley provided support for the price of gold as well on Monday. In a note to clients, the firm wrote that “Negative real interest rates, the prospect of further unconventional monetary policy in the US and Europe to confront uncertainties on the growth outlook, and heightened political tensions in the Middle East are all expected to underpin strong investment demand.”
