Gold slides as US Dollar climbs ahead of jobless and retail sales data, ECB policy meeting

Gold fell on a stronger US Dollar today amid bullish predictions for the yellow metal for 2010.
Consultancy GMFS projected gold to come back to record levels in the first half of the current year after climbing above US$1,200/oz at the end of 2009. GMFS said the average price during this period could be as high as US$1,175/oz compared to the current value of US$1,136/oz and last year’s average price of US$972/oz. Gold could be boosted by further weakening of the US Dollar, which contributed heavily to its last year’s surge, as well as its appeal as hedge against the inflation, which is likely to occur this year due to the Fed’s unwillingness to tighten the currently loose economic policy and keep the interest rates at the current levels.
GMFS concluded that gold could go as far as eclipse US$1,300/oz this year, while gold mine production is likely to resume declining in 2011 after climbing 6% in 2009 following three years of falls.
Strength of the US Dollar ahead of European Central Bank’s decision on interest rates that is due today was the main reason behind the yellow metal’s fall. Gold declined to US$1,136/oz on Thursday, while silver retreated to US$18.53/oz. However, platinum firmed, reaching US$1,587/oz.
Investors will be looking to the flurry of data that is set to be released in the US later today, including retail sales and jobless claims updates.
Mining stocks were mixed. In the FTSE 100, silver and gold miner Fresnillo (LSE: FRES) posted a small gain after updating the market on its Q4 production. Gold miner Randgold Resources (LSE: RRS) was flat, while another FTSE 100 constituent platinum miner Lonmin (LSE: LMI) declined marginally.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Aquarius Platinum (LSE: AQP) was the top performer among the midcaps with a 2% gain. Gold miner Petropavlovsk (LSE: POG) declined marginally and silver producer Hochschild Mining (LSE: HOC) was unmoved.
Fiji focused gold miner Vatukoula Gold Mines (AIM: VGM) led the small caps, climbing 13%. Kyrgyzstan focused gold explorer and developer Chaarat Gold Holdings (AIM: CGH) followed with an 11% rally, while Commodity asset development company Mercator Gold (AIM: MCR) added 9%.
Copper and gold miner EMED Mining (AIM: EMED) also did well, takcing on 5% after updating the market on its Rio Tinto project in Andalucía. Iran focused gold explorer Persian Gold (AIM: PNG) and Australian gold and copper prospector Solomon Gold (AIM: SOLG) both added 5%.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (AIM: KEF) slipped 17% on no news today. Tajikistan operating gold miner Kryso Resources (AIM: KYS) slid 7.5%, Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) declined 6% and South Africa and Botswana operating diamond miner Firestone Diamonds (AIM: FDI) was down 5.5%.  http://www.proactiveinvestors.co.uk/companies/news/12183/gold-slides-as-us-dollar-climbs-ahead-of-jobless-and-retail-sales-data-ecb-policy-meeting-12183.html