GOLD PRICE NEWS – The gold price began the new year on a positive note as a deal to avert the United States’ fiscal cliff fueled a rally in financial markets across the globe. This morning, the spot price of gold climbed by as much as $17.30, or 1.0%, to $1,695.37 per ounce. The SPDR Gold Trust (GLD), the world’s largest gold price proxy, advanced by $1.95, or 1.2%, to $163.97 per share.
Gold prices also received a boost from weakness in the U.S. dollar, which fell by 0.4% against a basket of foreign currencies, as the markets moved into risk-on mode. The sell-off in the dollar helped propel other precious metals to strong gains. Silver jumped by $0.74, or 2.4%, to $31.34 per ounce, platinum by 2.3% to $1,577.70 per ounce, and palladium by 1.9% to $716.80 per ounce.
The gold stocks sector fared quite well in concert with the price of gold this morning, as the Market Vectors Gold Miners ETF (GDX) rose by as much as $1.14, or 2.5%, to $47.53 per share. Barrick Gold (ABX) and Goldcorp (GG), the world’s two largest gold stocks, added 1.7% to $35.61 and 2.3% to $37.54 per share, respectively. Newmont Mining (NEM), the only gold stock included in the S&P 500 Index, advanced by 1.7% to $47.21 per share.
The last-minute fiscal cliff resolution helped the broader equity markets surge higher as well, with the Dow Jones Industrial Average (DJIA) climbing 240.37 points, or 1.8%, to 13,344.51. While the markets reacted rather positively, however, many economists and strategists criticized the agreement as yet another can-kicking exercise by politicians that fails to address the structural problem of excessive government spending.
Steven Englander, a fixed-income strategist at Citigroup, wrote in a note to clients that “The process was so chaotic and the outcome so unsatisfactory that we are likely to see a further U.S. downgrade at some point.”
As for the gold price, with today’s gain it reached a two-week high, but is coming off its worst quarterly performance – a 5.6% decline – since the third quarter of 2008. Analysts at Marex Spectron offered a cautious view on the price of gold, contending that “The temporary resolution of the fiscal cliff problem, coupled with some new year zeal, will push prices higher to start with, but overall nothing has really changed from this time a week ago, or a month ago.”
“As such, the markets will remain slightly moribund and range bound between $1,650 and $1,700 for the time being,” the firm added.
Copyright Gold Alert All rights reserved.