The price of gold eased last week as the lacklustre demand and retreat in several other commodities alerted traders to lock in three-day value of gains with the expectation that the U.S. monetary policy would loosely remain to lend a its support as of the moment.
There were speculations that the Fed’s easy monetary policy will assist gold upon the Fed’s chairwoman robust contention in defending the spur of economic growth.
The ultra-loose monetary policy has been the primary driving force of the high gold prices in the past few years which has fallen 23 % this year on speculative notions.
With spot gold declining to 0.3 % at $1,285.45 an ounce, the precious metal climbed more than $20 per ounce in the past three successive days of last week following the on2-month low at $1,260.89 late last week. Moreover, U.S. gold futures for December delivery were not performing well which was down $2.40 per ounce at $1,285.00.
The overall sideways environment has no proof that the U.S. is facing economic recovery. The expectations of the circumstance clearly will push more of a negative impact on gold. Prospectively, there shouldn’t be negativity coming back to push the market into a bullish situation.
The European stocks were flat last week with the benchmark Brent crude oil futures and copper were down 0.4 % and 0.2 % respectively along with the dollar index.
Asian demand withers
Gold demand from major consumers in the Asian market remained very complaisant with the Chinese premiums falling to about $5.50 an ounce from $7.50 last week.
Prices were also not performing well especially in India which is set to be overtaken as the world’s primary gold purchaser this year by China following Indian authorities increasing their export duties for the sad precious metal.
The weakness in terms of the physical demand of gold in India is so rampant that any positive news for gold will not move the markets in the manner it would during the first few months this year.
With the primary concern pertaining to the challenges that the Indian markets has witnessed in the second half of this year have indicated imports the second semester could indubitably fall to 135 tons from 425 tons a year before. The world’s largest gold-backed exchange-traded fund, New York SPDR Gold Shares, mentioned that the bullion holdings will recommence in their planned withdrawal after posting their first net weekly inflow since the third quarter.
Finally, among all other precious metals, silver was down 0.5 %, inching slightly at the $20 an ounce while spot platinum was down 0.1 % at $1,435.50 an ounce and spot palladium was also down 0.6 % at $723.97 per ounce respectively.