After the diminishing 1.90 %, the U.S. Comex gold futures plunged once again to another 1 % last week to $1,281.1. The previous rate rebounded 0.3 % likewise last week as well.

The S&P 500 Index was able to rise 0.79 % last week along with the Euro Stoxx 50 index which was able to climb 1.39 % for this month. The European stocks were on the rise 1.46 %, with the U.S. stocks also similarly stated with a 0.48 % increase while U.S. gold futures were down 0.18 % correspondingly. In addition, the U.S. ten-year government bond yield was able to drift slightly above the 2.71  % level nearly no change from its prior level last month.

The diverse character of Commodity trading

Several big investment firms have already since pulled back their global commodities trading activities as regulators, having tightened up their respective trading rules for banks and raised their trading costs. Trading revenue likewise diminished around 18 % last year for the top ten banks amounting to $4.5 billion as compared to $14.1 billion four years prior according to the Coalition’s speculations.

Moreover, the aforementioned institutions are similarly consolidating their respective gold trading foreign exchange trading in electronic trading platforms including both markets that tend to be fluid and those that are heavily influenced by macroeconomic policies, inflation and interest rates.

Speculator’s point of view

The managed profit that were combined with gold positions declined for almost four consecutive weeks to 90, 137 contracts followed by another 15 % leap in short positions. The gold-backed ETP declined to a recent low of 1,735 metric tons which was down compared to a more recent peak of 1,69 metric tons a month prior. In the short-run, the revamp tension between Russia and the Ukraine regarding militants in Eastern Ukraine will help augment better prices in the precious metals market. However, in the longer run, the ever rising demand in China for gold coins, bars and jewellery along with the potential in cutting back gold import in India will be putting a well built foundation to pricing of gold.

Diminishing U.S. housing rehabilitation and suppressed Chinese Data

The February U.S. housing prices surged 6.9 % year-on-year which was by far the lowest rate of increase since January of last year. The sales of existing homes diminished to 4.59 million in March as against a recent peak of 5.38 million last year. Housing prices also increased as the dire winter weather has limited the supply of houses available. Prices also were on the rise faster than the increase in wages which limited the housing recovery. Although the U.S. economic outlook in the coming quarter unexpectedly jumped 0.8 % last month as compared to 0.5 % in February, the slowdown in China resulted in the government to pronounce more infrastructure spending and break in tax along with a cut of the reserve requirement by approximately 2 % for some of the predominating rural banks.