Gold prices took a nose dive in US trading last week after German factory data beat the possible outlook of the euro while comments from a Federal Reserve official suggested that investors should be earnestly preparing for a possible end to the monetary stimulus programmes that will ought to mitigate the precious metal.

On the Comex division of the New York Mercantile Exchange, it was revealed that gold futures last year traded at $1,281.20. Gold prices hit a session low of $1,278.80 per troy ounce and a high of $1,306.25 per troy ounce. Last year’s fourth quarter contract levelled at $1,269.45 per troy ounce with the lowest recorded from the mid-year resistance at $1,319.85.

Economic indicators on both sides over the Atlantic projected a weakened gold price. Earlier last week, official data revealed that German Factory orders went as high as 3.8 % in the second quarter which surpassed the market consensus forecasts which called for a 1.0 % gain.

Orders within the Eurozone went as high as 10 % last month while sales outside the region rose by just 0.9 %. This data gave the Euro more support on optimism that there will be much better days that will lie ahead for the single bloc currency as did an upward modification to the German economy from the IMF.

The multilateral lending institution tramped its German growth forecast to 1.4 % by 2014 of next year from the present 1.3 % level. While in other parts of Europe, a separate report reveals that Italy’s economy contracted a less than ordinary forecast at 0.2 % in the second quarter as compared for a 0.4 % predicted contraction which indicated that the Eurozone is the third largest economy that is presently stabilising.

Analysts are anticipating that the US trade deficit will further narrow down to $43.5 billion by the middle of the year. Comments poured from the key Federal Reserve officials to push prices at its lowest possible limit.

The chairman of the Federal Reserve bank of Dallas said that last week’s monetary stimulus programmes were not intended to last forever. A corollary of reining in the aforementioned massive stimulus in a timely manner is that the financial markets may have become too familiarised to what some have already pictured out in their conception. According to him, the distorts in the pricing of financial assets encourages complaisant analysis and can set the groundwork for serious misallocation of capital.

Such comments that were coupled with improving monetary reports grounded expectations for a much vigorous recovery in both the Eurozone and the order to bring about a conclusive end of loose monetary policies, which have pushed gold prices up in recent years.

Elsewhere on the Comex, silver for this quarter’s delivery was down 1.00 % at $19.523 per troy ounce, while copper was up 0.17 % which was being traded at $3.173 per pound.