GOLD PRICE NEWS – The gold price once again held steady on Friday despite two better than expected reports on the U.S. economy. The price of gold showed a muted reaction to encouraging economic data, holding near unchanged at $1,616 per ounce. In doing so, the spot gold price was on pace to post a weekly decline of just 0.3%, and remains near unchanged thus far in August.
Silver lagged the price of gold this morning, as it dipped 0.3% to $28.19 per ounce. However, gold’s sister precious metal was also set to finish near unchanged on the week, and remains in positive territory this month by 0.8%. Silver was weighed down a bit by the U.S. dollar, which advanced 0.5% against a composite of foreign currencies. The euro retreated 0.6% to 1.2297 against the dollar as well this morning.
Despite stability in the gold price, gold stocks headed south on Friday, giving back a portion of yesterday’s gains. Notable gold producers in the red today included AngloGold Ashanti (AU) and Harmony Gold (HMY), which slid 1.8% to $34.75 and 5.6% to $9.69 per share, respectively. The gold sector trailed the broader equity markets as well, as the S&P 500 Index inched up to a fresh 52-week high of 1,417.73.
The Market Vectors Gold Miners ETF (GDX) slipped 1.0% to $45.18 per share this morning, following Thursday’s 3.4% climb that marked the ETF’s best day since July 3rd. Nonetheless, the GDX has outperformed the yellow metal of late, as it remains higher by 0.7% this week and by 5.6% in August.
In recent weeks the gold price has consolidated largely between $1,590 and $1,620 per ounce in spite of a rebound in U.S. economic activity. Following positive reports on employment and retail sales, this morning’s data on leading indicators and consumer sentiment each beat expectations as well. The index of leading economic indicators for July rose 0.4% in July, above the 0.2% consensus estimate among economists. Additionally, the University of Michigan Consumer Sentiment Index for August came in at 73.6 versus the 72.2 level markets were expecting.
The yellow metal’s inactivity in August suggests that investors are willing to wait for more significant events in the weeks ahead to propel the gold price out of its recent trading range. In the U.S., these events include the Fed’s Jackson Hole Symposium on August 31, where Chairman Ben Bernanke will give a speech on the state of the U.S. economy and monetary policy – as well as the September FOMC meeting on September 12-13.
In Europe, while the sovereign debt crisis has cooled off a big in recent weeks, there are several items ahead likely to be catalysts for the financial markets. Mitsubishi analyst Matthew Turner wrote in a note to clients that he expects gold prices to remain range-bound in the short term.
Turner added that “There are quite a lot of events coming up in the euro area, such as the German constitutional court (ruling on the euro zone rescue fund), Spanish bond auctions, the IMF going to Greece, but they’re all in September. That will be the big month.”