Gold News

Gold Bounces as Stocks Fall on GDP Data, Eurozone Worries

From Chris Mullen at

Gold briefly spiked higher following Friday's better than expected US economic data, seeing a gain of $6.05 at $1090.15 an ounce.

The Dow, Nasdaq, and S&P stock indices also saw impressive gains at the open on but they then fell back at midday and ended notably lower on concerns over Europe's potential problems with sovereign debt.

First estimates of US GDP for the last 3 months of 2009 showed annualized growth of 5.7%, beating Wall Street forecasts dramatically at more than double the pace of the third quarter.

Employment Costs also rose faster than expected, while prices overall rose at a 2.7% pace.

Net of inventory rebuilding by US businesses, GDP increased by 2.2% annualized.

The Gold Price fell back off as stocks reversed course, recording a $9.50 loss at $1074.60 by midday, but rallying higher into the close and cutting losses to 0.2%, down 0.8% for the week.

The Gold Price in Euros recovered to €780 an ounce as the US Dollar index rose.

Crude oil fell below $73 a barrel. Treasury bonds also rose on fresh worries over fiscal problems in Europe.

Platinum gained $12 to $1509, and copper fell to about $3.05.

Silver jumped to $16.34 and dropped to $16.014 before, like the Gold Price, it also rose in late trade and ended with a gain of 0.1%.

For the week, silver lost 6.8%.

Gold Mining and silver equities fell about 2% midday Friday before they rebounded slightly in early afternoon trade, but they then fell back off further into the close and ended with as much as 4% losses, down some 7% for the week.

US data released later in the day showed the Chicago PMI and Michigan indexes of manufacturing sentiment improving faster than forecast, and rising sharply from last month.

Next week's US economic highlights include Personal Income and Spending, Construction Spending, and the ISM Index on Monday, Pending Home Sales on Tuesday, ADP Employment and ISM Services on Wednesday, Initial Jobless Claims, Productivity, Unit Labor Costs, and Factory Orders on Thursday, and January's jobs data and Consumer Credit on Friday.

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Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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