Gold Price Perks Up
The Real Asset Company | Nov 01, 2012 07:10AM ET
Well, didn’t the gold price end October with a bang and start November in just as positive a fashion. The spot gold price finished yesterday up $10.90 after a smooth day of trading as the New York exchanges opened. This means gold was down only 3.1% for the month – a lower than expected loss, despite the euro falling back and the US dollar index trading slightly lower. Meanwhile silver prices where up 0.8% for the day, but lost 6.5% this month, however it is still up 16% for the year.
It seems many were looking to take advantage of the quiet gold price and decided to invest in gold yesterday. Whilst buying is expected to slow slightly now, after the release of China’s PMI data showed manufacturing had increased for the first time since July. This has put speculation of further stimulus and easing being put on hold, hence gold is trading flat this morning as a result.
Today, however, US data releases are expected to draw the attention of the markets. Indicators of consumer confidence and manufacturing will be released but market participants remain wary with some predicting a contraction in manufacturing which may have expanded at a slower pace in October. Of course, the key jobs data is released tomorrow which many are holding out for.
According to Bloomberg data, holdings in gold-backed exchange-traded products reached another record yesterday to 2,588.24 metric tons. Gold futures for December delivery is little changed this morning at $1,721.20 an ounce on Comex.
EU rebellion
Meanwhile, here in the UK, Prime Minister David Cameron has been taught a lesson by the House of Commons last night which saw a majority vote against an increase in the EU budget. Both Labour and Conservative MPs came together to vote against the amendment, showing a unity against an increase in this budget when Cameron is (rightly) cutting spending here in the UK.
The Greek government unveiled its latest budget yesterday which has immediately prompted fears of renewed political and social instability. A worse-than-expected recession in 2013 is now predicted to be made even worse by the typical trade union response of striking next week because they don’t like the spending cuts being made, or in fact any spending cuts at all.
Once again further figures were released yesterday which help politicians and policy makers feel at ease with themselves but make the rest of us feel ignored and confused. Inflation has eased in the Eurozone (‘hurrah!’ says Draghi) but joblessness is on the up (‘we told you it was bad’ say the Europeans). Inflation came in at2.5% year-on-year for the 17 countries in the euro, down 2.6% in September. Unemployment remains the highest in Spain where 25.8% of people are unemployed.
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