PR: Gold Pulls Back As European GDP And Industrial Production Data Disappoints
Gold retreated back to US$1,080/oz on Friday after nearly recapturing the US$1,100/oz mark yesterday as the US Dollar stiffened against the euro on disappointing economic data from the European Union, which was released today showing Q4 GDP growth of just 0.1% for both the 16 member euro zone and 27 member EU. Europe’s largest economy Germany was stagnant in Q4, while Italy’s GDP was down 0.2% quarter on quarter, Spain posted a 0.1% decline and debt laden Greece’s GDP shrank 0.8%.
France was a bright spot with 0.6% growth.
Overall, however, the results disappointed investors to further weaken Europe’s single currency, which has been under pressure due to the debt problems surrounding a number of euro zone countries, including Greece, Spain and Portugal.
To add to the bad news, euro zone industrial output for December fell 1.7% from November and 5% year on year, as was reported by Eurostat. As a result the US Dollar climbed to nine month highs against the euro, while futures for the US Dollar Index rose to 80.73 on the ICE Exchange.
Gold, which is seen as a Dollar hedge and moved inversely to the greenback, fell back to yesterday's levels after the data was released.
Other precious metals followed as silver and platinum dropped to US$15.36/oz and US$1,499/oz respectively.
Mining stocks were in decline today. Silver and gold miner Fresnillo (LSE: FRES) was the heaviest faller in the sector in the FTSE 100 with a loss of nearly 3%. Fellow blue chips gold miner Randgold Resources (LSE: RRS) and platinum producer Lonmin (LSE: LMI) shed 1%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) went against the tide, posting a small gain.
Midcaps followed the trend with Aquarius Platinum (LSE: AQP) sliding to the bottom with a 4% decline. Silver producer Hochschild Mining (LSE: HOC) lost 1.4%, while gold miner Petropavlovsk (LSE: POG) declined marginally.
African focused nickel and gold exploration and development junior Nyota Minerals (ASX&AIM: NYO) led the juniors with a 13.5% rally.
Most other small cap miners were in decline. Lesotho operating diamond miner Kopane Diamond Developments (AIM: KDD) and Africa focused gold miner Pan African Resources (AIM: PAF) were down 7%, Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) shed 6% and Turkey focused gold miner Ariana Resources (AIM: AAU) fell 4.5%.
