GOLD PRICE NEWS – The sell-off in gold prices continued on Thursday after several better than expected U.S. economic reports and progress on the fiscal cliff situation provided headwinds for precious metals. The spot price of gold finished down by $20.14, or 1.2%, at $1,649.26 per ounce, its lowest level since mid-August. The SPDR Gold Trust (GLD), the most liquid gold price proxy in the financial markets, closed with a loss of $1.96, or 1.2%, at $159.73 per share.
Silver fared even worse than the price of gold, as it tumbled $1.44, or 4.6%, to $29.68 per ounce – also near a four-month low. Gold stocks came under only a moderate amount of pressure, however, as the broader equity markets turned higher. The Market Vectors Gold Miners ETF (GDX) slid $0.29, or 0.6%, to $45.07 per share while the S&P 500 Index advanced by 7.88 points, or 0.6%, to 1,443.69.
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Within the gold sector, notable decliners included GDX components Goldcorp (GG) and IAMGOLD (IAG) – which fell by 1.6% to $35.75 and by 2.7% to $11.03 per share, respectively.
Today’s schedule included four key data points on the U.S. economy. The one discouraging report was on weekly jobless claims, which at 361,000 came in above the 345,000 consensus estimate among economists. Alternatively, three reports beat expectations – including third quarter GDP growth of 3.1% versus the 2.7% estimate, the Philadelphia Fed Index of 8.1 versus negative 1.3, and existing home sales of 5.04 million versus 4.90 million.
The largely encouraging data provided investors and traders with a considerable amount of evidence to shun the safe-haven status of gold and move into riskier asset classes such as cyclically-sensitive stocks and commodities.
Another factor weighing on gold prices was a report that Morgan Stanley Smith Barney had advised its financial advisors to request that client funds be removed from Paulson & Co., the struggling hedge fund run by billionaire investor and noted gold bull John Paulson. The news fueled speculation that Paulson may in turn need to liquidate a considerable portion of its gold-related investments.