GOLD PRICE NEWS – The gold price stabilized near $1,660 per ounce on Thursday as financial markets remained in limbo due to the lack of a resolution on the U.S. fiscal cliff situation.  The spot price of gold held in a tight range between $1,653 and $1,661 in overnight trading, and oscillated between gains and losses this morning after a mixed bag of U.S. economic data.  The SPDR Gold Trust (GLD), the world’s largest gold ETF and gold price proxy, inched up by $0.02 to $160.80 per share.

Silver fared slightly better than the price of gold, as it rose by $0.10, or 0.3%, to $30.10 per ounce.  Gold and silver stocks also outperformed the yellow metal, as well as the broader equity markets.  The Market Vectors Gold Miners ETF (GDX) climbed $0.48, or 1.1%, to $45.63 per share while the S&P 500 Index slid 0.7% to 1,410.48.

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Among notable GDX components, three of the largest advancers on Thursday were Gold Fields (GFI), Harmony Gold (HMY), and Pan American Silver (PAAS).  Shares of GFI rose by 1.8% to $12.20, HMY by 2.7% to $8.63, and PAAS by 2.1% to $18.63.

Gold prices held firm this morning after Senator Majority Leader Harry Reid said that he no longer sees how the fiscal cliff can be avoided.  However, Reid’s comments could be interpreted as trying to pressure Republicans into caving on their tax demands.  As for President Obama, he held calls with Speaker of the House John Boehner and several other key policymakers last evening, but little progress was made.

Afshin Nabavi, head of trading at MKS Finance, wrote in a note to clients that “If the politicians reach an agreement on the fiscal cliff, the dollar could suffer and there could be more investment into gold.”

From a technical perspective, Nabavi contended that expects the gold price to hold in a range between $1,650 to 1,670 per ounce over the short-term.  “Every time we go to the lows near $1,650, there seems to be good buying,” he added.

As for the latest U.S. economic reports, the combination of positive and negative data points were unable to sway the price of gold much in either direction.  Weekly jobless claims came in at 350,000, below the 360,000 consensus estimate among economists.  While the employment data was encouraging, New Home Sales in November of 377,000 on a seasonally adjusted basis missed expectations of 379,000.  In addition, Consumer Confidence for December dropped from 71.5 in November to 65.1 – well below the 70.0 level economists were anticipating.

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