Gold staged something of a comeback this week after hitting a four-month low last Friday — due mostly to gains at the expense of the US dollar.
On January 4, the precious metal took a big hit, losing up to $48 at one point in the trading session. The reason for the drop was an indication from the Federal Open Market Committee's (FOMC) regular meeting minutes that the US central bank's quantitative easing program (QE3), open-ended up until now, could be disbanded before the end of the year. That had bullion traders and investors hitting their sell buttons on the expectation that an end to QE — which since 2008 has kept interest rates near zero and flooded financial markets with cheap money —would be bearish for gold.
The week began on a more positive note, however, with the yellow metal rising above $1,650, buoyed by gains in stock markets on Tuesday and Wednesday, and firming near $1,680 Thursday on a sharp plunge in the US dollar. Reuters
that the euro rose to a one-week high after European Central Bank (ECB) President Mario Draghi said that the ECB is seeing improvements in financial markets and will therefore not cut its benchmark interest rate or increase stimulus. That had the US dollar index falling and gold subsequently rising.
Spot gold on Thursday was last quoted at $1,674.80, up $16.80 from the previous session. COMEX gold futures also increased in value, with gold for February delivery up $22.20 an ounce to close at $1,677.00.
Anglo American (LSE:
) announced on Tuesday that it has found a new CEO to replace Cynthia Carroll, who stepped down in October. Current AngloGold Ashanti CEO, Mark Cutifani, will head the multinational miner. "Mark Cutifani is an experienced listed company chief executive with a focus on creating value. He is a seasoned miner, with broad experience of mining operations and projects across a wide range of commodities and geographies, including South Africa and the Americas," Anglo wrote in a statement. AngloGold Ashanti, meanwhile, has started a search for a new chief executive.
Discussions between African Barrick Gold (LSE:ABG) and China National Gold over the sale of a stake in ABG have collapsed, the Financial Times reported. State-owned China National Gold was considering purchasing a 74-percent stake in the Tanzanian gold producer. Ending speculation about the deal cost ABG a 21-percent drop in its stock price to 352.1p.