GOLD PRICE NEWS – The gold price oscillated between gains and losses on Wednesday as precious metals consolidated following their recent stretch of gains. The spot price of gold held in a relatively narrow range between $1,673 and $1,685 in overnight trading, and hovered back near unchanged at $1,677.60 per ounce later this morning. The stability in gold prices mirrored that of the U.S. Dollar Index, which remained near the flatline at 79.772 against a composite of foreign currencies.
Silver initially lagged the gold price this morning, as it fell to as low as $31.09 per ounce, but later rebounded toward unchanged at $31.41. Commerzbank analyst Daniel Briesemann noted that “Precious metals are relatively robust against a firmer U.S. dollar. There may be some consolidation throughout the day but I wouldn’t say prices can fall considerably in the next couple of days.”
In contrast to the metals, however, most gold and silver stocks retreated modestly alongside the broader equity markets. The Philadelphia Gold & Silver Index (XAU) dropped by 0.5% to 162.74 while the S&P 500 Index dipped by 0.2% to 1,469.56.
Among widely-held gold and silver stocks, notable decliners included XAU components Eldorado Gold (EGO), Newmont Mining (NEM), and Pan American Silver (PAAS). Shares of EGO slid by 0.8% to $13.02, NEM by 0.7% to $44.87, and PAAS by 1.1% to $18.62.
Also on Wednesday, leading metals consultancy firm GFMS reiterated its bullish outlook for gold prices in the year ahead. The firm forecasted that the price of gold will average $1,775 per ounce in the first half of 2013, and $1,847 during the full year.
Philip Klapwijk, GFMS’ head of research, stated that “I think we could see investment in a number of arenas, and at a higher set of (gold) prices. Commentary on the dollar/euro has shifted in recent months from being very bearish on the euro. We don’t see much scope for dollar appreciation this year.”
Klapwijk went on to say that “We are also expecting the Fed will continue with its asset purchase programmes, and that we won’t see these cease in 2013. We think the U.S. economic performance will disappoint this year.”
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