Gold Price Firm, Dollar Retreats amid Weak U.S. Data

 
on December 03 2012 11:57 AM

GOLD PRICE NEWS – The price of gold inched higher on Monday amid weakness in the U.S. dollar and a rally in many commodities. Following last week’s 2.1% slide, the spot gold price advanced by $3.41, or 0.2%, to $1,717.38 per ounce. The U.S. Dollar Index fell by as much as 0.5% to 79.799 – its lowest level since late October – as further uncertainty surrounding the fiscal cliff situation pressured the greenback.

Silver outperformed the price of gold this morning, rising $0.24, or 0.7%, to $33.68 per ounce. Among other precious metals, platinum and palladium futures fluctuated between gains and losses. As for cyclical commodities, crude oil was one of the largest gainers, as it jumped $1.03, or 1.2%, to $89.94 per barrel.

In contrast to the gold price, the gold stocks sector traded slightly lower. The Market Vectors Gold Miners ETF (GDX), comprised of 30 of the world’s largest precious metals companies, dipped by $0.15, or 0.3%, to $47.40 per share.

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Notable gold stocks heading south included GDX components Goldcorp (GG), Gold Fields (GFI), and Newmont Mining (NEM). Shares of GG dropped by 1.5% to $38.13, GFI by 3.3% to $11.87, and NEM by 2.1% to $46.09.

Gold prices were also buoyed on Monday by disappointing U.S. economic data. The ISM Manufacturing Index for November came in at 49.5, below the 50 level that separates expansion from contraction activity. Furthermore, the 49.5 figure missed the 51.4 consensus estimate among economists and marked a decline from 51.7 in October.

Following the ISM announcement, the broader equity markets relinquished their gains. The S&P 500 Index, which initially climbed 0.5% to 1,423.73, soon after retreated into negative territory at 1,414.77.

Looking ahead to the rest of the week, there are several additional U.S. economic reports likely to influence the price of gold and the broader financial markets. The ADP Employment data and the ISM Services Index for November will each be released on Wednesday morning, followed by Weekly Jobless Claims on Thursday. The week subsequently concludes on Friday with the much-anticipated non-farm payrolls and unemployment data, along with the University of Michigan Consumer Sentiment Index for December.

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