On Wednesday, gold prices reached a one-week high of about $1,725 an
ounce on speculation that Europe’s debt woes will be contained after
euro-area finance chiefs discussed giving Greece more time to meet
bailout targets. Spot gold was trading at $1,722.9 at 11:25 GMT on Thursday, up 0.17
percent, while US gold futures for December rose $4.60 to $1,723.70, according
to Reuters. Investors remain focused and cautious before US employment
data due on Friday, which will provide clues about the direction of
monetary policy.
Gold’s climb started on Tuesday after the Bank of Japan announced
an expansion of its asset-purchase program by 11 trillion yen ($138
bilion) to 66 trillion yen. The announcement fueled expectations that
Japan’s plan to stimulate economic growth will boost demand for gold as
an inflation hedge. “It looks like speculators are dipping their toes in again, but
probably only to do a bit of window dressing ahead of month end,” Saxo
Bank vice president Ole Hansen told Reuters. “Do not expect any major fireworks unless we close above $1,730 or until after non-farm payrolls on Friday.”
Gold rose for a third consecutive day on Thursday as China’s
manufacturing expanded for the first time in three months, increasing
demand prospects for commodities. China’s Purchasing Managers’ Index climbed to 50.2 in October, a sign that economic growth is picking up after a seven-quarter slowdown.
World’s top gold producer reports loss
Share of Barrick Gold (TSX:ABX,NYSE:ABX)
fell more than 7 percent in early trading on Thursday after the world’s
top gold miner reported a sharp drop in third-quarter profit. The miner bumped up for the second time the cost of building its
massive Pascua-Lama mine, located high in the Andes mountains on the
border between Chile and Argentina, to $8 billion to $8.5 billion from
an earlier budget of $7.5 billion to $8 billion.
Canadian mid-tier gold miner Yamana Gold (TSX:YRI) reported
a “6 percent fall in third-quarter adjusted profit on Monday as lower
metal prices and higher production costs outweighed strong gold sales
volumes.” Yamana “maintained its production outlook for the year and
said its development projects are on time and on budget.”
