Gold Price Rebounds from 6-Week Low, Eyes Fed Meeting
GOLD PRICE NEWS – The gold price bounced back from earlier losses on Monday alongside the broader financial markets. The spot price of gold fell to an overnight low of $1,714.73 per ounce, but later climbed back into positive territory by $4.63 at $1,727.12. However, following last week’s 1.8% decline, the gold price remained near the lower end of the range it has occupied since early September.
In a note to clients, Credit Suisse analyst Tom Kendall wrote that “The (gold) market was very long up at around $1,800 and we’ve seen some of the length being unwound. I suspect more will be reducing positions and a lack of any tremendous desire to buy at this level. The path of least resistance is still lower.”
Kendall went on to say that “The market is looking for a pickup in demand from physical players in India. It would provide support but generally speaking, given what we’ve seen so far in India I’m not sure you would expect buying on a scale that would drive the price much higher.”
Silver rebounded in conjunction with the price of gold this morning, from an overnight low of $31.71 per ounce to rally by $0.28, or 0.9%, to $32.42 per ounce. Gold’s sister precious metal is also coming off of a difficult week, as it slid 4.1% to its worst level since late August. Nonetheless, on a year-to-date basis the prices of gold and silver remain up by 10.5% and 17.0%, respectively.
Gold stocks headed higher in tandem with the gold price as well, with the Market Vectors Gold Miners ETF (GDX) rising $0.45, or 0.9%, to $52.18 per share. The GDX eked out a fractional gain of 0.1% last week and has substantially outperformed the price of gold in recent months.
Notable GDX components in the black on Monday included Goldcorp (GG) and Newmont Mining (NEM), which advanced by 0.8% to $43.65 per share and by 0.7% to $55.29 per share. One of the best performing stocks in the GDX Aurizon Mines (ARZ.TSX, AMEX: AZK), which jumped 3.0% to $4.83 per share. Aurizon’s rally was driven in part by an upgrade from Dundee Securities, which raised its rating on the Canadian gold miner to Buy from Neutral and lifted its price target to C$6.00 from C$5.80.
(For more coverage of upgrades and downgrades in the gold stocks sector, visit GoldAlert Pro at http://pro.goldalert.com )
Looking ahead to this week, all eyes will be on the Federal Reserve and Chairman Ben Bernanke on Wednesday as the U.S. central bank holds it first Federal Open Market Committee (FOMC) meeting since launching its open-ended third round of quantitative easing (QE3) in September. While the Fed is not expected to alter the size or structure of QE3, its outlook for the U.S. economy and monetary policy are likely to be important catalysts for financial markets in general and gold prices in particular.
In addition to the Fed meeting, New Home Sales will be announced on Wednesday, followed by weekly Jobless Claims, Durable Goods and Pending Home Sales on Thursday. The economic data will then conclude on Friday with third quarter U.S. GDP and the University of Michigan Consumer Sentiment Index.
2012-10-22 13:55:23
Source: http://www.goldalert.com/2012/10/gold-price-rebounds-from-6-week-low-eyes-fed-meeting/
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