Gold futures have strengthened this morning, rising around $5 an ounce. Gold is currently changing hands at around $1,055. Last week saw a further increase in activity on the gold market as mid-week trading saw a number of new highs, peaking at just over $1,070. The gold rally appears to have been put on the back burner in recent sessions as investors evaluate the outlook for the yellow metal.
It has been clear that the US Dollar has been the principal driving force over the course of this rally which has seen gold rise around $200/ounce since April. The dollar index has risen marginally overnight and this morning and appears to be capping the Gold price.
In the past couple of months, gold seems to have been at the top of investors' agendas. The level of speculative ‘net long’ positions reached new highs, with both investors, traders and institutions all getting in on the action. Given the strength of the recent gold price, many commentators have indicated that any form of Dollar recovery will trigger selling as traders lock in short term profits.
Analyst sentiment is becoming increasingly mixed as more and more commentators, company CEOs and economic pundits throw in their ‘two-cents’. Generally the debate has centred around the relative strength of the US Economy, the potential for global inflation and the US Dollar’s role as the global reserve currency.
In a largely mixed session FTSE 100 constituent Randgold Resources (LSE: RRS, NYSE: GOLD) rose 0.5%, while diversified precious metals miner and developer Petropavlovsk (LSE: POG) fell more than 1½% after rising strongly earlier today.
Canadian based Yamana Gold (LSE: YAU, TSX: YRI, NYSE: AUY) was notably stronger, advancing 2% to trade at £7.40.
On the AIM market, Turkey focused gold miner Ariana Resources (AIM: AAU) led the sector with a 10% gain. Brazil focused gold miner Horizonte Minerals (AIM: HZM) followed with a 7% climb. South American based explorer Mariana Resources (AIM: MARL) and Africa operating gold and platinum miner Goldplat (AIM: GDP) added 6% and 4.3% respectively. Western Australia operating Norseman Gold (AIM: NGL) was up 3%.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) and copper and gold miner EMED Mining (AIM: EMED) dropped 6% and 4% respectively. UK-registered China operating copper and gold miner Central China Goldfields (AIM: GGG) lost 6.5%.