GOLD PRICE NEWS – The gold price turned modestly lower on Thursday amid strength in the U.S. dollar after a plethora of global economic data. Gold prices fell as much as $9.88, or 0.6%, to $1,739.12 per ounce earlier this morning, but subsequently pared its losses. The U.S. Dollar Index (DXY) rose as much as 0.3% to 79.242 while the euro currency dipped 0.2% to 1.3089 against the greenback.
Silver retreated alongside the gold price, by $0.23, or 0.7%, to $32.96 per ounce. Other precious metals also fared worse than the price of gold, as platinum futures tumbled 1.4% to $1,646.90 per ounce and palladium slid 0.8% to $647.90 per ounce. Among cyclical commodities, copper futures dropped 0.$% to $3.73 per pound while crude oil declined by 1.3% to $91.40 per barrel.
Gold stocks came under pressure as the price of gold headed south, with the Market Vectors Gold Miners ETF (GDX) falling $0.94, or 1.8%, to $52.17 per share. Barrick Gold (ABX) and Goldcorp (GG) – the GDX’s two largest components – declined by 1.5% to $39.34 and by 2.0% to $43.36 per share. Newmont Mining (NEM) – the third largest holding in the GDX and the only gold stock included in the S&P 500 Index – slid 1.2% to $55.38 per share.
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Gold prices showed a moderately negative reaction to overnight news that third quarter Chinese GDP grew by 7.4%. While the figure was in-line with the median estimate among economists, speculation had risen that the report was going to come in worse than expected given the stretch of weak data out of China in recent months.
In the U.S., weekly jobless claims rose to 388,000 – above the 360,000 level economists were expecting. The disappointing report was tempered by two subsequent better than expected data points, as both the Philadelphia Fed Index and a report on Leading Economic Indicators came in above levels most economists were anticipating.
With today’s sell-off, the spot price of gold extended its decline thus far in October to 1.9% and is on pace for its first consecutive weekly losses since May. Nonetheless, the yellow metal remains up by 11.2% on a year-to-date basis and less than 3.3% from its high this year of $1,798 per ounce.
In her latest remarks on the gold price, UBS precious metals strategist Edel Tully wrote that “Gold is trying to establish a foothold around the mid $1700s as we step into what is traditionally the busy season for gold demand in India. Recently we’ve noted an improvement in Indian gold buying, but the interest has trailed off since Tuesday to settle about 11% below this year’s average. The sharp price moves of late likely acted as a deterrent as physical buyers tend to prefer jumping in when prices are stable.”
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