Gold rebounds as US dollar pulls back
Gold prices edged higher this afternoon as better than expected results of today's Spanish bond auction lifted the euro, while reducing demand for the safe haven US dollar, which is seen as an alternative asset to the yellow metal.
Spain managed to raise €6 billion at today's auction of five, nine and ten year notes, to service its debts. The euro zone's fourth largest economy initially planned to raise between €2.5 billion and €3.5 billion.
Gold extended gains later in the session when strong US data reduced demand for safe haven assets such as the US dollar, pushing the greenback further down.
The Department of Labor reported that jobless claims in the US dropped 19,000 last week to hit the lowest level in nearly four years at 366,000, suggesting that the US job market is in better shape than thought.
Later in the day, the Federal Reserve said its Empire State manufacturing index hit six month highs, surging from 0.6 in November to 9.5 this month, a sign that the economic recovery in the US is picking up speed.
Gold prices fell sharply yesterday after the Federal Reserve decided against introducing further stimulus measures, hitting gold's appeal as an inflation hedge.
Gold traded at US$1,582/oz this afternoon, up US$6 from Wednesday's close. Other precious metals were headed in the opposite direction with silver dropping 4 cents to US$28.92/oz and platinum falling US$3 to US$1,416/oz.
Today's top risers in the sector were:
Central Rand Gold (LON:CRND), up 26 percent at 0.73 pence at midday
African Consolidated Resources (LON:AFCR), up 14.5 percent at 3 pence
Arian Silver (LON:AGQ), up 8 percent at 17.15 pence
European Goldfields (LON:EGU), up 5.5 percent at 770.5 pence
Highland Gold (LON:HGM), up 4 percent at 189.5 pence
The top fallers were:
Orsu Metals (LON:OSU), down 9 percent at 7.26 pence at midday
Angel Mining (LON:ANGM), down 7.5 percent at 1.54 pence
Avocet Mining (LON:AVM), down 5 percent at 193.25 pence
North River Resources (LON:NRRP), down 4.5 percent at 1.62 pence
Mariana Resources (LON:MARL), down 3.5 percent at 9.75 pence
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