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Gold Edges Higher

The metal is taking a back seat to equities, but mining shares are higher.

Updated from 11:14 a.m. EDT

Metal traders struggled to find meaningful direction Thursday despite stout economic data.

The Department of Labor reported that last week's initial jobless claims were 308,000 vs. a forecast of 312,000. The figure for the prior period was revised slightly upward to 304,000 from 302,000. Separately the Commerce Department announced a bigger-than-expected trade deficit of $69.9 billion for August. Investors had expected the deficit to hit $66.5 billion, down slightly from the prior month's $68 billion.

Finally, the Federal Reserve's beige book report was generally upbeat with just two Fed districts reporting that growth "cooled" compared to five in the September beige book. The Fed believes inflationary pressures remain contained but the report notes that labor market conditions remain "taut," which prompted further discussion of wage inflation.

But bullion traders took a back seat as the strong economic data helped push the major indices to new highs. The

Dow Jones Industrial Average

was recently rallying 78 points at 11,930, looking set for another record. On the other side of Wall Street, bullion trading was subdued with contracts for December delivery edging higher to end the session at $580.30 an ounce up $3.80 on the Comex division of the New York Mercantile Exchange.

The weak performance of the metal this fall has been a disappointment to some gold bugs, but other observers note that seasonally robust demand for jewelry in India may have prevented a total meltdown.

"The physical buying has prevented the market falling even lower," says James Moore, an analyst at

TheBullionDesk.com

in London. "I think we are still seeing a lot of physical interest from India, but we are approaching the end of the wedding season, so that may drop off soon."

Moore sees technical support for December futures at around the $572 to $575 level, and short-term resistance at around $583 to $585.

The bullion exchange-traded funds,

streetTracks Gold Shares

(GLD) - Get SPDR Gold Shares Report

and

TheStreet Recommends

iShares Comex Gold Trust

(IAU) - Get iShares Gold Trust Report

, were moving up about 0.6% recently.

Among the miners, shares of

Agnico-Eagle Mines

(AEM) - Get Agnico Eagle Mines Limited Report

were jumping about 3.9% lately, while the

Market Vectors Gold Miners ETF

(GDX) - Get VanEck Gold Miners ETF Report

was gaining 1.4%, both buoyed by the strong equity market.

In base metals, Comex December copper contracts closed down 2.35 cents at $3.3865 a pound. The slippage in the metal price didn't seem to faze investors who were bidding up shares of miner

Southern Copper

(PCU)

, which were recently lifting 2%.

Also in copper, the latest London Metal Exchange report shows that stocks rose 100 tons to 114,000 tons. That compares with a calendar low of about 90,000 reached in early July. Buyers hoping that slowing demand will lead to high stock levels and lower prices may, however, be disappointed. That's because investment interest from commodity index funds is causing the historical relationship between copper stocks and price levels to break down, according to a recent report by Peter Hollands, managing director at London-based Bloomsbury Minerals Economics.

"Even at much higher stock levels, prices will remain higher than in the past," the report states.