FUNDAMENTALS FOR GOLD “STRONG”

by Goldline.com | August 05, 2010

Gold prices are consolidating on the New York Spot Market as of 11:05 a.m. EST as investors digest disappointing weekly jobless claims ahead of Friday's U.S. unemployment number. The metal has climbed this week as China unveiled plans to relax trading rules for bullion and the dollar on Aug. 3 slipped to a three-month low against the euro. (Bloomberg, 8/5/10)

Stocks are down on the New York Stock Exchange as investors anticipate the Labor Department's monthly jobs report on Friday. The report, one of the most closely watched on Wall Street, is expected to show the U.S. economy lost 87,000 jobs in July. "We've got a market that seems to be waiting on pins and needles ahead of all-important payrolls report," said Art Hogan, chief market analyst at Jefferies & Co. (CNN Money, 8/5/10)

The fundamentals driving the price of bullion remain strong according to the chief executives of two of the word's biggest gold producers. Nick Holland, the CEO of South African-based Gold Fields told CNBC that while prices may consolidate a little over the coming months, the long-term picture remains strong. “Gold has regained its investment status as a safe haven and we'll continue to see that over the next year. Plus of course the fundamentals in the gold sector - we're not seeing significant additional supply coming on board and we have seen a big increase in demand, certainly in dollar terms, for jewellery as investment. So I would continue to see that the demand for gold would continue to be strong," Holland said. Mark Bristow, CEO of London-listed and west-African focused Randgold Resources, agrees. "We're getting a tightening of a new gold supply, that is supply and demand, elasticity in the market, and then of course, the outlook, the global economic outlook," Bristow said. (CNBC, 8/5/10)

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