Gold Price Steady as Recession Concerns Mount

The gold price held steady near $1,615 per ounce Friday morning while concerns over a global economic slowdown continued to weigh on financial markets.  The spot price of gold climbed to as high as $1,635.80 in overnight trading, but relinquished its gains as the U.S. dollar moved higher against a basket of the world’s leading currencies.  The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, dipped 0.4% to $157.02 per share in pre-market activity.

While the gold price stabilized, U.S. equity markets looked to open considerably lower.  S&P 500 futures were down 14.25 points, or 1.3%, at 1,141.75.  Equity markets throughout Europe and Asia posted steep losses after a key Chinese manufacturing survey showed that industrial output declined for the third consecutive month in September.  HSBC’s China Manufacturing Purchasing Managers’ Index (PMI) came in at 49.9 this month, unchanged from August and below the 50 level separating expansion from contraction.

Disappointing economic data in the U.S. also provided a headwind for financial markets.  The Commerce Department reported that real consumer spending was unchanged in August following a 0.4% rise in July.  Personal income for August declined 0.1%, below the 0.1% increase expected by economists.  The worse than expected report was the latest in a series of disappointing data points indicating that U.S. economic growth continued to considerably slow.

This morning’s stability in the gold price mirrored yesterday’s activity, when the price of gold held near unchanged for most of the day.  The spot gold price finished slightly higher, by $5.85 at $1,614.99 per ounce.  Gold equities posted modest gains alongside the yellow metal, with the AMEX Gold Bugs Index (HUI) rising 0.7% to 523.91.  Notable advancers included Goldcorp (GG) and Newmont Mining (NEM), which added 0.5% and 1.6%, respectively.