This morning the Gold price has found some stimulus in the weaker dollar which pushed the yellow metal within a whisker of $1,060. Early activity suggests a marked improvement after last week’s subdued performance which saw gold slip below $1,030 mid-week before mounting a mild comeback.
In electronic trading Globex Gold futures for December rose $16 to hit an intraday high of $1,059.2, subsequent trading has eased somewhat as the morning progressed, futures last changed hands at $1,054.
In the early trading hours, the Asian session put the dollar under pressure as the ambiguous economic outlook in the United States persists. After US economic data continued to blow hot-and-cold last week, Foreign Exchange investors arrived in selling mood on Monday. The Euro has been the main beneficiary as it climbed more than 40 pips this morning.
Last week saw a particularly conflicted US recovery outlook which led risk-averse investors flock back to the dollar out of higher yielding currencies, providing the dollar with respite after weeks of perpetual weakness.
Although the US Economy was hailed as being ‘out-of-recession’ as better than expected third quarter GDP for 2009 saw America achieve growth of 3.5%, other indicators however implied a less emphatic return to grace, with contrasting economic reports implying that consumer spending fell during the same period, as did production.
Insight into the next key influence on recovery will sharpen into focus by weeks end, the US Labor Department’s non-farm payroll report is due on Friday. The key report will reveal the latest monthly trend in the American job market which is suffering from the worst unemployment rate since the early 1980’s.
It is widely acknowledged that the weakening US Dollar has been the principle driver of this most recent ‘record-breaking’ rally. As the gold price pushes back above $1,060, all eyes will be on the US economy and foreign exchange markets in the coming week.
On the London Stock Exchange Gold equities have surged off the back of the advancing yellow metal price. International gold miner Randgold Resources (LSE: RRS) was particularly strong this morning rising almost 5% to trade at £41.40. Canadian based Yamana Gold (LSE: YAU) and diversified precious metal producer Petropavlovsk (LSE: POG) were also strong as both stocks advanced around 2.5%.
Junior developers and explorers on AIM found support also, the strongest was Uzbekistan operating explorer Oxus Gold (AIM: OXS) which jumped almost 13% this morning. Patagonia Gold (AIM: PGD) and Mercator Gold (AIM: MCR) were also fairly strong rising 5% and 4% respectively.
Algerian focused GMA Resources (AIM: GMA) and Centamin Egypt (LSE: CEY) have also performed well this morning taking on over 3%, meanwhile Cluff Gold (AIM & TSX: CLF) rose 2%.