Gold Price Steady, Hurricane Sandy Forces U.S. Market Closures

GOLD PRICE NEWS – The gold price stabilized near unchanged at $1,710 per ounce on Monday as many U.S. financial markets were closed due to Hurricane Sandy.  The price of gold held in a tight range between $1,708 and $1,720 in overnight electronic trading.  However, volumes were thin this morning as the COMEX in New York City is not open.

Silver fared moderately worse than the gold price, as it fell $0.20, or 0.6%, to $31.90 per ounce.  Gold and silver stocks in the U.S. are not trading today as U.S. equities and equity option markets are closed as well.

Canadian equity markets were open, nonetheless, as the S&P/TSX Global Gold Index traded up by 0.2% to 335.98 this morning.  Barrick Gold (ABX.TSX) and Goldcorp (G.TSX) – two of the largest components of the Gold Index – rose by 0.1% to C$39.15 and by 0.3% to C$43.86 per share, respectively.

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Across the Atlantic, most European equity markets were largely in the red on Monday, along with their counterparts in Europe.  Currency and fixed income markets remained open, however, as the euro retreated by 0.3% against the U.S. dollar to 1.2909 and the U.S. ten-year treasury yield declined by 4 basis points to 1.71%.

At $1,710 per ounce, the price of gold remains up by 9.4% on a year-to-date basis and on track for its twelfth consecutive annual rise.  However, the yellow metal is coming off of three straight weekly declines for the first time since September 2011.  Thus far in October the gold price has dropped by 3.6% amid a rebound in the U.S. dollar and widespread weakness in the commodities complex.

Bayram Dincer, analyst at LGT Capital Management, wrote in a recent note to clients that “Gold has been trading lower as it follows the US Dollar appreciation.”  He went on to say that the gold price “is still range-bound, lacking any upside drivers above $1725 an ounce…the lower range of $1700 is perceived as a good support.”

Looking toward the week ahead, gold prices may remain in a narrow range until U.S. markets reopen in full.  Hurricane Sandy is forecast to move over the coast of many U.S. mid-Atlantic states by Monday evening, and the New York Stock Exchange has noted that it may remain closed on Tuesday.

This week’s U.S. economic calendar is particularly heavy, with several noteworthy reports scheduled for release over the next four days.  The latest Case-Shiller home price index is expected to be announced on Tuesday morning, followed by the ADP Employment Report and the Chicago Purchasing Managers’ Index (PMI) on Wednesday.  Thursday’s docket includes Weekly Jobless Claims and the monthly ISM Index.  The week subsequently concludes on Friday with the report most likely to impact gold prices and the financial markets as a whole – the monthly non-farm payrolls data and unemployment report.