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Gold Firm on Corrective Bounce, Bargain Hunting

December 5, 2012 - Following Tuesday’s selling pressure that brought gold to $1,690.64 per troy ounce, the weakest prices in the market since November 6, gold rebounded above the $1,700 per troy ounce level as the precious metal tracked gains in wider markets, particularly European equities. U.S. gold futures for February delivery gained $5.00 to $1,701.20 per troy ounce in early trade on Wednesday. The spot price of gold gained $2.70 to $1,700.00 per troy ounce. Silver also gained at $0.177 to $32.98 per troy ounce.

Overnight, Asian stocks rallied on news that Chinese government officials are seeking to bolster the economy with more construction projects. The news translated over to Europe, fresh from an agreement on Greece’s debt, which brought the euro to six-week highs against the dollar and European stocks higher.

In the U.S., the market place continues a focus on the U.S. fiscal cliff automatic tax hikes and spending cuts set to take effect in January. The rhetoric in Washington continues unabated though markets are paying less attention and seeking either to anticipate a last minute deal or sit out the market in wait for more definitive language regarding policy. Overall, per an analysis with Forbes, the situation has been a bearish drag on many markets, including the raw commodities and stock markets.

Investors and analysts are looking for more concrete data. The U.S. non-farm payroll data will be released this Friday and next week the Federal Reserve will conduct its last Federal Open Markets Committee meeting of the year on December 10th and 11th. The Operation Twist Program is again set to end and FOMC members will decide whether to extend the bond-buying program. While a push to QE4, as some investors believe will be the focus of next week’s meeting, may be jumping the gun on the heels of QE3, just announced in mid-September, an extension of the Operation Twist program or a restructuring of the program may be an important influence on markets.

Many analysts see the gold and silver markets remaining range-bound through the end of the year absent a major market influence as gold and silver have already moved into a sideways pattern, albeit choppy.

Meanwhile, sales at the U.S. Mint show a continued demand for American gold and silver coin bullion. Monday’s sales figures for American Eagle Silver coins registered 700,000 ounces over all of last week’s 500,000 ounces. Year-to-date, the Mint has moved 32,807,500 ounces. $50 American Eagle Gold Coins have sold 561,00 ounces year-to-date with 7,000 ounce moving Monday over 68,000 ounces sold last week.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

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