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Posts Tagged ‘meeting news’

GOLD PRICE NEWS The gold price fell $16.20 to $1,216.26 Thursday as the spot price of gold finished lower for the third consecutive session. The SPDR Gold Trust (GLD), which acts as a proxy for the gold price, closed down by $1.59, or 1.3%, at $118.98 per share. in spite of todays weakness, the gold price remains modestly higher for the month, by $2.12, but turned negative by $2.09 on the week.

Gold stocks did not follow the gold price lower, with shares of most gold miners rising alongside the broader market. Notable advancers in the gold stocks sector included Agnico-Eagle Mines (AEM), Freeport McMoRan Copper & Gold (FCX), and Gammon Gold (GRS). Shares of AEM, FCX, and GRS posted gains of 1.9%, 5.9%, and 3.4%, respectively.

Weakness in the gold price came as the euro rallied against the U.S. dollar for the third straight day, rising 1.0% to 1.2116 as U.S. equity markets closed. The euro climbed after European Central Bank (ECB) President Jean-Claude Trichet said the European Unions central bank will continue its bond purchase program, a component of the $1 trillion rescue plan announced last month at the height of the Greek debt crisis. Trichet made the remarks during his monthly post-ECB meeting news conference, but declined to provide details on the scope or duration of the purchase program.

The rescue announcement in mid-May fueled concerns of inflation among investors and sent the euro to a four-year low against the dollar. ECB officials have subsequently made great efforts to note that the bond purchases are sterilized i.e., they are offset by other asset sales and result in no increase in liquidity. however, investors have remained skeptical of such assurances, and have fled the euro for the safety of assets tied to the price of gold.

Commenting on the European sovereign debt crisis at a conference in Vienna, Austria, legendary investor George Soros sounded quite skeptical of the measures taken by European policymakers. Soros, who is perhaps best known for founding the Quantum Fund with Jim Rogers in the 1970s, stated that The collapse of the financial system as we know it is real, and the crisis is far from over. indeed, we have just entered Act II of the drama.

The billionaire investor went on to say that the present global economic environment is eerily reminiscent of the 1930s, with governments recently coming under pressure to reduce their budget deficits during a period when the economic recovery remains fragile. when the financial markets started losing confidence in the credibility of sovereign debt, Greece and the euro have taken center stage, but the effects are liable to be felt worldwide, Soros stated.

Given Soros stellar track record, investors will pay close attention to his comments. If the dire scenario he describes unfolds, the euro is likely to come under additional pressure in the months ahead. Despite the recent three-day rebound, the euro remains near a four-year low against the U.S. dollar, with many investors and traders eyeing the 1.15 or 1.10 as the next likely target. Such a development would most likely be a substantial positive catalyst for the gold price, which has benefited from economic uncertainty and the policy responses to the deflationary aspects of the sovereign debt crisis.

Gold Price Dips, but “Crisis far from over”