GOLD PRICE NEWS – The gold price jumped $19.34, or 1.2%, to $1,618.40 per ounce on Tuesday as the prospects for further monetary easing across the globe gained steam. Gold prices advanced alongside the broader commodity markets, which were buoyed in part by slight weakness in the U.S. dollar. The SPDR Gold Trust (GLD), a proxy for the price of gold and the world’s largest precious metals ETF, rose $2.00, or 1.3%, to $157.09 per share.
Silver climbed in conjunction with the gold price, by $0.67, or 2.4%, to $28.24 per ounce. Other precious metals turned sharply higher as well, with platinum futures up by 1.5% at $1,477.25 per ounce and palladium by 3.7% at $597.75 per ounce. Among cyclical commodities, copper futures rose 2.2% to $3.55 per pound while crude oil surged 4.2% to $87.30 per barrel. Part of oil’s advance was fueled by comments from an army general in Iran, who stated that the nation would not “sit idly” by as the U.S. and Europe built a missile-defense shield program that could target Iran.
Gold and silver shares posted large gains as well, with the Philadelphia Gold & Silver Index (XAU) jumping 3.6% to 163.31. Among gold miners, Barrick Gold (ABX) climbed 3.5% to $38.74 per share while Goldcorp (GG) added 4.1% to $38.87 per share. Silver Standard Resources and Silver Wheaton (SLW) – two of the most widely-traded silver stocks – advanced by 4.9% to $11.97 and by 5.6% to $28.45 per share, respectively. The sector also substantially outperformed the broader equity markets, as the S&P 500 Index was higher by only 0.5% at 1,372.61
As for the gold price, “Bullion extended Friday’s gains on a technical breach of $1,600,” according to VTB Capital analyst Andrey Kryuchenkov. “Just as before, gold continues to track the broader market, with sentiment still upbeat in the wake of the euro zone summit in Brussels at the end of last week.”
Kryuchenkov went on to say that “Peripheral bond yields in the euro zone remain subdued from last week’s highs, while many are expecting a rate cut by the ECB (of 25 basis points) on Thursday.”
Commerzbank analyst Eugen Weinberg noted in a report to clients that the potential for further easing in the U.S. has also helped support the price of gold. “Over the last few weeks U.S. numbers have worsened a lot and this has brought about the probability of QE3,” Weinberg wrote, “which is probably the most important reason for the market to believe in gold.”
U.S. equity markets will close early today, at 1pm ET, and re-open at their normal time on Thursday in observance of the July 4th holiday.