GOLD PRICE NEWS – The gold price consolidated on Friday near the low end of its weekly range following yesterday’s sell-off.  The spot price of gold held in a tight range in overnight trading, between $1,694 and $1,702 per ounce, but remained on track for its third consecutive weekly decline.  Today’s stability in gold prices coincided with a relatively quiet open on Wall Street and tepid movement in the U.S. dollar against a basket of the world’s most traded currencies.

Silver oscillated between gains and losses near $32.59 per ounce, in concert with the price of gold.  Nonetheless, gold’s sister precious metal also remained on pace for its third straight week of losses.  Furthermore, the prices of gold and silver are now lower on a month-to-date basis by 1.0% and 2.5%, respectively.

As for gold stocks, the Market Vectors Gold Miners ETF (GDX) inched up by $0.16, or 0.4%, to $46.50 per share on Friday.  Gold stocks have fared considerably better than the gold price this week, as the GDX remains up by 1.2%.  The sector also outperformed the broader equity markets this morning, as the S&P 500 Index dipped 0.2% to 1,416.28.

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Within the gold sector, notable advancers included GDX components IAMGOLD (IAG) and Randgold Resources (GOLD).  Shares of IAG climbed by 1.6% to $11.64 while GOLD added 0.8% to $100.67 per share.  Among silver stocks, GDX components Hecla Mining (HL) jumped by 1.6% to $5.66 and Silver Standard Resources (SSRI) rose by 1.2% to $15.05 per share.

The gold price showed a muted response this morning to the latest key U.S. economic report.  The Consumer Price Index (CPI) – a closely-followed measure of inflation – posted its first monthly decline in November since May of this year, as it fell by 0.3%.

The inflation rate drop came in below the 0.2% decline that economists were expecting, and will provide the Federal Reserve with additional evidence to support its ultra-loose monetary policies.  Fed Chairman Ben Bernanke also noted at this week’s FOMC meeting that “Longer-term inflation expectations continue to be well anchored.”

While lower inflation readings are generally supportive of higher gold prices, the yellow metal remains stalled by profit-taking heading into the end of the year – according to Andrey Kryuchenkov, an analyst at VTB Capital.

He added that he expects the price of gold to remain in consolidation mode until the U.S. fiscal cliff situation is resolved.  “As we have reiterated before, sustained gains are still unlikely as we continue in a sideways pattern near December lows,” Kryuchenkov asserted.

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