Gold Price Hits Best Level Since May as U.S. Dollar Slides
Gold Price GOLD PRICE NEWS – The gold price climbed to a three and a half month high on Tuesday amid weakness in the U.S. dollar and a broad-based rally on Wall Street. The spot price of gold jumped as much as $21.90, or 1.4%, to $1,643.42 per ounce, its highest level since May 6th. Furthermore, the gold price broke out of the $1,560-$1,630 trading range it had occupied for most of the past three months.
Commenting on the gold price’s advance, VTB Capital analyst Andrey Kryuchenkov asserted that “A break above $1,630 is very significant, as we breach the June-July and early August range. Buy orders were triggered, with the dollar index also slipping below support at 82, or early July lows.”
Silver rose in conjunction with the price of gold, by $0.51, or 1.7%, to $29.37 per ounce. In doing so, gold’s sister precious metal reached its best level since June 7th and surpassed the high end of its recent trading range as well. With today’s strength in precious metals, the prices of gold and silver extended their gains thus far in August to 1.8% and 5.0%, respectively.
Gold stocks surged higher alongside the gold price and the broader equity markets, as the Market Vectors Gold Miners ETF (GDX) moved up by $1.50, or 3.3%, to $47.12 per share. With its advance, the GDX reached its best level since June 20th and extended its monthly gain to 10.1%. Not to be outdone, the S&P 500 Index rose 0.6% to 1,425.95 – its highest print since May 19, 2008.
Within the gold sector, three of the best performing large-cap producers included Barrick Gold (ABX), Eldorado Gold (EGO), and Harmony Gold (HMY). ABX jumped by 3.1% to $37.57, EGO by 5.6% to $12.59, and HMY by 5.2% to $9.46 per share.
U.S. markets followed their European counterparts higher, where several benchmark equity indices touched 13-month highs ahead of two key policymaker meetings this week. Luxembourg Prime Minister Jean-Claude Juncker, head of the euro-area group of finance ministers, will meet with Greek Prime Minister Antonis Samaras in Athens tomorrow to discuss a possible two-year extension to the nation’s austerity program. On Thursday, German Chancellor Angela Merkel will meet with French President Francois Hollande in Berlin to discuss next steps as officials continue working to combat the sovereign debt crisis.
Back across the Atlantic, investors are awaiting tomorrow afternoon’s release of the latest Fed minutes – a recap of last month’s FOMC meeting. The markets will be paying close attention to any hints that Chairman Ben Bernanke and his fellow central bankers may soon launch a third round of quantitative easing (QE3).
Despite how well the broader financial markets have performed in recent months, there remains considerable speculation that the Fed will implement QE3 before the year ends. This expectation appears to be reflected in the gold price, given the fact that it was finally able to surpass the high end of the aforementioned trading range that it was stuck in for several months.
2012-08-21 08:26:58
Source: http://www.goldalert.com/2012/08/gold-price-hits-best-level-since-may-as-u-s-dollar-slides/
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