Gold advanced more than 2% and back over the $1,800 price level this week on uncertainty about the future of the US economy and whether more stimulus was to come. Stock also have fallen on news that consumer confidence was lower than expected.
By Claudia Assis and William L. Watts
Aug. 30, 2011, 11:54 a.m. EDT
SAN FRANCISCO (MarketWatch) — Gold futures regained the $1,800-an-ounce mark Tuesday, surging more than 2% as investors questioned the rebound for U.S. equities and had lingering concerns about the state of the global economy.
Gold for December delivery GC1Z +2.37% rose $41.70, or 2.3%, to $1,833.20 an ounce on the Comex division of the New York Mercantile Exchange.
“It all comes to disbelief the [Standard & Poor’s 500 Index] will hold up at $1,200,” said Charles Nedoss, a senior market strategist with Olympus Futures in Chicago. “There’s still a lot of uncertainty out there.”
Stocks fell early Tuesday after a gauge of consumer confidence showed U.S. households much more pessimistic about the economy than expected.
Recently, however, stocks edged back higher. Read more about U.S. equities.
Gold went on a wild ride last week, tumbling sharply after notching a record just pennies away from $1,900 an ounce on Aug. 22.
The metal steadied at the end of last week but saw renewed pressure on Monday as U.S. equities rallied, inspired in part by relief that Hurricane Irene was less destructive than feared, although the storm still caused deaths and billions in destruction along the East Coast.
Economic data and lingering hopes that the Federal Reserve may provide an additional boost to the economy also helped lift equities on Monday, while metals saw modest selling pressure amid thin volume.
Global equities traded mixed on Tuesday, with most Asian markets ending higher and Europe posting gains.
On economic policy, Charles Evans, the president of the Chicago Fed, said Tuesday the Federal Reserve needs to do more to lift the economy.
In an TV interview, Evans said he was “somewhat nervous” about the recovery and described the labor market as in a recession-like state. Evans added he favored a stronger easing move at the Aug. 9 FOMC meeting than was ultimately not forthcoming.
At the meeting, the FOMC said it thought that short-term interest rates would remain near zero until mid-2013. That boosted gold, which went on to hit a string of records earlier in the month.
On the supply front, miner Randgold Resources Ltd. UK:RRS +2.05% GOLD +1.69% trimmed its production outlook for the year Tuesday after heavy rainfall at its Loulo Gounkoto gold mining complex in Mali.
The group said it’s now aiming for production at the mine to exceed the 80,000 ounces it achieved last quarter, rather than the previous target of 100,000 ounces. Randgold also revised its overall annual production guidance to a range of 740,000 to 760,000 ounces from a previous range of 750,000 to 790,000 ounces.
Most metals tracked gold higher on Tuesday, with September silver SI1U +2.14% rising 74 cents, or 1.8%, to $41.29 per ounce. Copper for the same month’s delivery HG1U +1.25% rose 5 cents, or 1.3%, to $4.14 a pound.
Investors earlier digested data showing that home prices in the U.S. rose 1.1% from June to May. However, they are down 4.5% for the past year, according to the S&P/Case-Shiller 20-city composite home price index.
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