Gold Prices Stabilize, U.S. Dollar Climbs

GOLD PRICE NEWS – The gold price failed to recoup any of yesterday’s losses on Friday as the U.S. dollar continued to advance against a composite of the world’s most prominent currencies.  The spot price of gold held near unchanged at $1,715.24 per ounce while the U.S. Dollar Index advanced by 0.3% to 81.275.  In doing so, the greenback reached its highest level since early September.

Gold prices have been stymied of late by the rally in the dollar, which has been the primary safe haven asset class to which investors have turned of late as the broader financial markets have shifted into risk-off mode.  Silver has also retreated in recent days due in to a combination of the dollar’s strength and weakness in the commodities complex. This morning, the price of silver fell by $0.31, or 0.4%, to $32.48 per ounce.

While the prices of gold and silver were unable to gain any traction on Friday, shares of many precious metals companies rebounded modestly following a large sell-off on Thursday.  The Philadelphia Gold & Silver Index (XAU) – which yesterday dropped to its lowest level since August 31st – rose by 0.4% to 165.08 this morning.

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A few of the better performing XAU components included Harmony Gold (HMY), Hecla Mining (HL), and Yamana Gold (AUY).  Shares of HMY advanced by 1.2% to $7.65, HL by 1.0% to $5.42, and AUY by 1.2% to $18.46.

Commenting on the recent weakness in gold prices, Simon Weeks – head of precious metals at Scotia Mocatta – stated that “Gold is being seen increasingly as a source of cash. Liquidation of gold can cover losses elsewhere.”

As for the broader equity markets, exchanges across Europe remained in the red on Friday, as the German DAX slid by 0.8% to 6,989 while the French CAC dropped by 0.4% to 3,368.  In the U.S., the Dow Jones Industrial Average fell by 0.3% to 12,507.90 and the S&P 500 Index by 0.2% to 1,351.30.