Gold Price Slides, Liquidation Engulfs Financial Markets
GOLD PRICE NEWS – The price of gold came under further selling pressure on Tuesday amid widespread liquidation on Wall Street. The spot gold price fell as much as $28.29, or 1.3%, to $1,706.84 per ounce this morning, its lowest level since September 7th. Weakness in gold prices was fueled by a rally in the U.S. dollar – which climbed 0.4% against a basket of foreign currencies – and broad-based selling in commodities.
Silver tumbled in concert with the gold price, by as much as $0.77, or 2.4%, to $31.65 per ounce – its worst level since September 2nd. In doing so, silver extended its loss in October to 8.4%, compared to a 3.8% decline for the price of gold.
Gold stocks were hit by a combination of weakness in precious metals and the broader equity markets. The Market Vectors Gold Miners ETF (GDX) dropped $1.45, or 2.8%, to $50.98 per share while the S&P 500 Index sunk 24.30 points, or 1.7%, to 1,409.52.
Equities in general were pressured by disappointing earnings results from several large-cap multinational companies. In addition, markets fell after Moody’s downgraded the credit ratings of several regions in Spain – which sparked further concerns that policymakers are ill-equipped to handle the ongoing European sovereign debt crisis.
Within the gold sector, notable GDX components heading south included Agnico-Eagle Mines (AEM), Goldcorp (GG), and Kinross Gold (KGC). AEM retreated by 2.7% to $52.18, GG by 2.7% to $42.55, and KGC by 2.7% to $9.94 per share.
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Commenting on today’s gold price sell-off, Deutsche Bank analyst Daniel Brebner stated that “You’ve had QE priced in and what we’re seeing now is a bit of a retracement following that. We have a pause in monetary policy action; it’s very unlikely we’re going to see anything in the U.S. and China while there is political transition.”
Brebner went on to say that “Conditions economically remain tenuous… there are concerns with respect to growth, and therefore the potential for deflation is starting to pick up a little bit. This is really causal to gold’s decline.”
Looking ahead for the price of gold, Brebner contended that “We’re likely to see some support around the 1,700 level, but right now I’d characterize the market as being in a trading range, with some downward pressure within that.”
2012-10-23 20:00:12
Source: http://www.goldalert.com/2012/10/gold-price-slides-liquidation-engulfs-financial-markets/
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