The Gold price continued to suffer overnight, falling further to slip below $1,040. In electronic trading, Comex gold futures have stabilised slightly from Tuesday’s ‘settled’ price of almost $1,035, the December contract was last changing hands at $1,037.
The US dollar delivered another positive trading performance yesterday, as ‘risk’ money returned to the dollar from higher yielding currencies. The move followed after worse-than-expected US consumer confidence data raised doubts of US demand, which could stall a global recovery that has become increasingly priced into financial markets.
The London’s Intercontinental Exchange (ICE) the US Dollar Index has risen steadily throughout the morning and currently stands at 76.40. The Dollar index represents the strength of the greenback against a basket of the 6 major global currencies.
Over the course of the last month, the weak US Dollar has provided a fundamental base to the rally over recent weeks but there is a definitive speculative element also. Among speculators, ‘Net-long’ trading remains at an all time high in the futures market. As such commentators claim that the initial dollar move and the declining yellow metal price triggered a round of profit taking to further pressure the Gold price.
Up until now, Gold seemed to have had a persistent appeal over recent months as the record breaking rally was sustained over recent weeks to hold above historic levels. The recent, all time high represents a 21% rise over the year to date. The most bullish analysts are expecting a sustained rally.
On the London Stock Exchange, Gold stocks generally fell for a second day with most stocks seeing red as the yellow metal came under pressure.
International gold miner Randgold Resources (LSE: RRS) was the worst effected tier one stock losing over 2% while diversified precious metal producer Petropavlovsk (LSE: POG) lost over 1.5%. Canada based Yamana Gold (LSE: YAU) was more robust easing just half a percent lower this morning.
In the junior market, a select few Aim listed gold stocks advanced against a generally negative trend this Wednesday. South American focused gold explorer Mariana Resources (AIM: MARL) was easily the strongest performer in the sector, Mariana leapt over 35% higher earlier today, following the announcement of a significant new gold-silver discovery.
Avocet Mining (AIM: AVM) was particularly strong also advancing 6% this morning as the South Asia focused explorer reported increased gold production and revenues during the third quarter. Both Mercator Gold (AIM: MCR) and Patagonia Gold (AIM: PGD) also found positive ground today, rising 4%.
Ariana Resources PLC (AIM: AAU) added a further 3% after a particularly strong performance in a weak market on Tuesday. Yesterday the Turkey-focused gold group announced was setting up a 50-50 joint venture with a domestic partner to develop the Sindirgi and Tavsan projects in the country.
Elsewhere, the rest of the junior market declined broadly in-line with London’s main market. Fijian focused Vatukoula Gold (AIM: VGM), Uzbekistan operating Oxus Gold (AIM: OXS), Cluff Gold (AIM: CLF) and Norseman Gold (AIM: NGL) traded lower on Wednesday.