This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Erases Gains, Dips on Fed Minutes (Update1)

(Updated from 10:28 a.m. ET with settlement price and FOMC statement.)

NEW YORK ( TheStreet) -- Gold prices sank on Thursday on a dour statement from the Federal Reserve. Gold had jumped $13, or 0.8%, on Wednesday, helped by the deal on the so-called fiscal cliff.

Gold for February delivery shed $14.20 to settle at $1,674.60 an ounce at the Comex division of the New York Mercantile Exchange on Thursday. The gold price had traded as high as $1,690.50 and as low as $1,662.70 an ounce. The spot price was dropping $20.40, according to Kitco's gold index. And the yellow metal plunged more than half a percent as the Fed's policy-making wing released its latest minutes.

The Federal Open Market Committee said there were potential risks to financial stability over a disorderly finish to the so-called fiscal cliff, impending discord about raising the debt ceiling and possible deterioration of conditions in Europe.

Notably, sentiment among the FOMC members was split.

"In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases. Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013," the minutes said.

Gold prices popped nearly $20 on Monday on President Barack Obama's optimistic remarks that a deal was in sight for Congress to avoid the so-called fiscal cliff -- when automatic deep-spending cuts and tax hikes were supposed to go into effect -- and then the precious metal surged another $13 in the first trading session after the deal passed.

Silver prices for March delivery fell 29 cents to close at $30.72 an ounce, while the U.S. dollar index was surging 0.65% to $80.37.

The Labor Department on Thursday said initial jobless claims for the week ended Dec. 29 rose by 10,000 to 372,000. Economists had expected 365,000 claims.

The report came as a prelude to Friday's monthly unemployment situation, in which gold investors will be keeping an eye on where the unemployment rate moved in December. This is because the Federal Reserve last month implemented a new open-ended, $45 billion a month purchasing of longer-term Treasury bonds with economic targets for interest rates that included a national unemployment rate drop to 6.5%, or if inflation exceeded 2.5%.

Analysts view stimulus as inflationary, which often boosts the value of gold.

The November unemployment rate printed at 7.7%, and consensus among economists polled by Thomson Reuters expect the rate to remain unchanged for the December report. Nonfarm payrolls are expected to rise by 150,000; November payrolls rose 146,000.

Sometimes seen as a barometer of the government's monthly employment situation, payroll processor Automatic Data Processing's monthly report said employers added 215,000 jobs in December. The number printed better than economists' expectation of 133,000, but investors should know that the ADP data often doesn't correlate with the government's numbers.

Gold-mining stocks were mostly lower on Thursday. Shares of Goldcorp (GG - Get Report) were losing 4.7%, while Yamana Gold (AUY) was off 4.2%.

Among volume leaders, Barrick Gold (ABX - Get Report) was dipping 2.7%, and Kinross Gold (KGC) was shedding 3.9%.

Gold ETFs SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) each were losing 1.1%.

-- Written by Joe Deaux in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $122.07 -0.11%
IAU $12.34 -0.16%
ABX $17.87 2.35%
GG $18.73 1.46%
NG $6.24 3.65%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs