Gold Stays Low As Hope Fades For Fiscal Cliff Resolution
With little news to move the gold price amid thin holiday trading, spot gold finished at an even $1,663, up $3.60 from Boxing Day. Gold futures also increased marginally, with the February gold contract last trading up $3.40 an ounce , at $1,664.10.
The precious metal was lifted slightly by short covering and bargain hunting, even reaching $1,666 at one point during the day, but those gains were limited by the US Labor Department's news that applications for unemployment benefits fell to one of the lowest levels of the year. The US dollar gained as a result, putting pressure on gold.
Gold investors and traders are also increasingly leery of stalled negotiations over the US "fiscal cliff" deadline, with many preferring to sit on the sidelines and wait and see. Lawmakers in Washington have until January 1 to come up with a deal that will avoid $600 billion in tax increases and spending cuts slated to kick in come the new year. Economists predict that the measures will push the country into a recession.Senate Majority Leader Harry Reid on Thursday did not inspire any hope of a resolution, and was quoted by The Independent as saying it "looks like" the US is heading over the fiscal cliff.
Company newsRandgold Resources (NASDAQ: GOLD) announced that production at its Tongon gold mine in Cote d'Ivoire was impacted due to a mill fire. The incident occurred on December 24 during a planned shutdown. "The fire has been fully extinguished and no injuries have been reported but both cyclone clusters, flotation cells and blowers along with associated infrastructure for both milling circuits suffered damage," Randgold said in a statement. The company's stock suffered a 0.54-percent decline on Thursday. Al Jazeera reported that 4,000 miners suffering from lung disease have launched South Africa's largest-ever class-action lawsuit against AngloGold Ashanti (NYSE:AU), Goldfields (NYSE:GFI) and Harmony Gold Mining (NYSE:HMY). The plaintiffs claim to have contracted severe lung ailments such as tuberculosis and silicosis while working in underground gold mines and are demanding millions of dollars in compensation from the defendants, which are some of the world's biggest mining companies.
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