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Gold is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold Rally Stalls After Hitting $1,155 on Wednesday, London’s Gold Equities Slide With Exception of a Few Juniors
Gold prices have eased somewhat overnight after Wednesday saw another strong session in which the yellow metal hit yet another new high, as futures raised the bar to $1,155. A slight rebound in the dollar, sparked a phase of selling, with many commentators pointing to profit taking as the primary force to the downside.
In electronic trading on the Chicago Mercantile Exchange, Globex futures have traded lower all morning, with the December contract last changing hands at $1,135.
Also this morning, the World Gold Council (WGC) said that demand for gold is likely to remain well supported by continued economic and currency uncertainty, inflation concerns and the search for diversification.
According to the industry’s lobbying group, central banks were likely to "diversifying their dollar exposure in favour of the proven store of value represented by gold". In its quarterly report, The WGC said that total identifiable gold demand reached 800.3 tonnes in the third quarter of 2009. With a value of approximately $24.7 billion, global gold demand was up 15% from the previous quarter.
In summary of recent trends in the gold market, the US Dollar’s influence appears clear. For months, the gold market has persistently fed off US dollar weakness, many analysts and commentators now see $1,200 gold in 2009 as a real possibility.
On the London Stock Exchange the waning gold rally has affected most miners and explorers with most gold companies falling on Thursday morning, although a hand full of juniors have managed to push higher this morning. International gold mining major Randgold Resources (LSE: RRS) dropped more than 2% to trade at £48.90, while Petropavlovsk (LSE: POG) was also weak, losing almost 1.5%. Canada based Yamana Gold (LSE: YAU) was practically unchanged on the day.
On the AIM market a number of junior exploration stocks moved against the wider trend and have been trading in positive territory. Algerian focused GMA Resources (AIM: GMA) led the way rising over 3%, Medusa Mining (AIM: MML) followed as the Philippines-focused explorer climbed over 2.5%. Also among the risers was Norseman Gold (AIM: NGL) who added 1.5% to yesterday’s closing price.
