GOLD PRICE NEWS – The gold price moved lower Monday morning, sliding $5.00 to $1,470 per ounce. After posting yet another all-time high last night at $1,478 per ounce, the price of gold came under pressure on the back of strength in the U.S. dollar. Despite the weakness in gold, silver gained $0.19 to $41.12 per ounce.
Silver continues to soar, outpacing the gold price day after day. The $41.95 per ounce high touched last night was the tenth time this year that silver hit a new 31-year high. The price of silver last traded above $40 in January 1980, on its way to an all-time high of $50.35 when the Hunt Brothers attempted to corner the market. Silver has not only outperformed the gold price, but has been one of the best performing commodities in 2011, posting a year-to-date gain of 33%.
Gold and silver equities, which have lagged the price of gold and silver thus far in 2011, were under selling pressure heading into today’s opening bell on Wall Street. The Philadelphia Gold & Silver Index (XAU), a composite of the world’s largest gold and silver companies, climbed 5.2% last week. However, year-to-date the XAU remains in negative territory, by 0.3%, and 2.9% below its 232.73 all-time high, reached on December 7, 2010. Notable miners moving lower Monday morning included AngloGold Ashanti (AU), Yamana Gold (AUY), and Goldcorp (GG).
With the gold price and silver price continuing to move higher, metals and mining analysts have begun to garner increased attention. Michael Jansen, precious metals analyst at J.P.Morgan, reiterated his bullish outlook in a note to clients on Friday. “The only natural shorts in gold and silver (producers) are unlikely to cumulatively quell the rallies we are seeing in these metals,” Jansen wrote.
The J.P.Morgan analyst went on to say that “We have had a long term target for gold at $1500 and we are rapidly approaching, with gold at $1470 currently. Silver is on track to our oft-mentioned $40-$45 level and it is so well sought after from the paper and ETF community that calling a top is a futile gesture.”
While Jansen acknowledged that the eventual end of the gold and silver bull markets will likely “be very messy,” he contended that this is “a story for well in to 2012.” Until then, the price of gold and silver are likely headed higher if Fed Chairman Bernanke “retains his dovish tone and the USD is under pressure from sovereign risk and rates.”
TD Newcrest raised its precious metals outlook during the week, noting that “While we prefer gold to silver over the medium and long term, we see potential for the silver price to continue to outperform in the short term on the strength of speculative investment flows.”
With regard to silver specifically, TD Newcrest wrote that “We would highlight in particular the potential for ETF purchases to push the silver market into deficit in the second half of this year… There is also an argument to be made for the fundamental elements of the market to support the price in the short term where we expect continued growth in fabrication, and in particular from the solar industry in Asia, at a time when we don’t foresee a major response from the supply side.”
Looking ahead to the economic calendar, several data points are likely to impact the gold price and the currency markets. Import and export prices will be reported on Tuesday, followed by Retail Sales and the Fed’s Beige Book on Wednesday. Thursday includes weekly jobless claims and the Producer Price Index (PPI). Another key measure of inflation, the Consumer Price Index (CPI), is scheduled for release on Friday, along with the Empire Manufacturing Index and University of Michigan Consumer Sentiment.
(Source: http://www.goldalert.com/gold-price-sinks-after-hitting-new-high-at-1478/)
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