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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 spikes to $1006, but falls back after US economic data
Gold futures rose over $10 from this morning lows, the December Comex gold contract tipped $1,006 from the intraday low of $993. The move follows the US Dollars decline as it comes under pressure from a strengthening Euro and a ‘flight to risk’ in the Forex market.
December Gold futures are currently changing hands at $999 this afternoon.
Recent weeks have seen investors flock to gold, prices have rallied as high as $1,025 as futures approached all time highs. With today’s momentum building gold will have achieved it strongest quarterly performance in over eighteen months.
Such is the prevailing trend, today’s gold market has been predominantly driven by forex trading. Earlier today the European Central Bank revealed that it had lent the member state’s banks around €75bn to aid the Eurozone economy. The Euro gained impetus, rising against the dollar earlier today. This was subsequently followed by broader based selling against the dollar as the session progressed.
Interestingly this afternoon’s positive GDP data echoed an earlier trend, whereby the news of a stronger US economy actually produced a weaker Dollar. Cash flowed out of the US Dollar as investors who had previously sought its shelter, moved out of the low yielding currency in favour of riskier assets.
In London major gold equities gained impetus from the resurgent yellow metal price, international gold producer Randgold Resources (LSE: RRS) advanced almost 2% to build on yesterdays modest gains. Randgold gained 43p to trade at £43.63 per share.
The FTSE 250 gold miner Petropavlovsk (LSE: POG), formerly known as Peter Hambro Mining were stronger also, gaining over 2% today. Meanwhile Canada based Yamana Gold (LSE: YAU) rose nearly 3% to trade at £6.46.
AIM listed Gold equities experienced mixed trading on Wednesday. Indonesian focused explorer Archipelago Resources (AIM: AR.) lead the junior gold stocks on AIM, rising almost 8%, while Philippines focused gold producer Medusa Mining (AIM&ASX: MML) were strong also, climbing 6%.
Diversified commodity asset development company Mercator Gold (AIM: MCR) announced it had sold 8 million in Australian listed Silver Swan it received as payment for exploration ground in Western Australia, Mercator rose 7%.
Algeria operating gold miner GMA Resources (AIM: GMA) and Western Australia operating Norseman Gold (AIM: NGL) rose over 2%.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) were the worst effected on the fallers list dropping around 20%.
Turkey focused gold miner Ariana Resources (AIM: AAU) slipped 6%, Australian based explorer Solomon Gold (AIM: SOLG) followed sliding 5%. Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and Turkey and Ethiopia focused gold explorer Stratex International (AIM: STI) shed more than 2%.
African focused gold deposit developer Cluff Gold (AIM: CLF) released their interim report and stated that its on Course to Achieve Forecast Gold Production, despite the news Cluff shares fell marginally, losing just one pence.
