Gold’s 2015 rally appeared to be shaky last week with the metal was found to be falling for a second day in a row to levels last seen on January 9.

The diminishing decline in the price of gold came in spite of the rising concerns that Greece might possibly abandon the euro and Ukraine may be heading for a wider conflict with a stronger U.S. dollar which is doing most of the injury.

During the afternoon trade on the Comex division of the New York Mercantile Exchange gold for April delivery plummeted 1.1. % or 13.60 % to exchange hands at $1,218.60 an ounce at the lows for the day.

Gold’s 2015 gains were back on track on the safe haven demand which has now been cut to around $30 million an ounce as the metal beat a stable retreat from a high of $1,307 hit last January 22.

Yields on the benchmark U.S. treasury remained on the higher side of 2 % last week which has risen for the sixth consecutive session to a one month high.

It is an indication that markets are presently expecting an eminent rate hike by the U.S. Federal Reserve over the summer months. Higher yields raises the prospecting costs of holding gold since the metal in itself provides no income.

Higher rates were also bolstered with the value of the U.S. dollar – already trading at multi-year-highs which normally move in the opposite direction of the price of gold.
Last week, the U.S. currency edged higher again which came close to a 12-year high against the currencies of its primary trading partners which hit late last January. The dollar index was further strengthened by a 17.4 % over the last year.

According to reports, Germany’s Commerzbank last week was able to predict a gold price of $1,250 an ounce by the end of the year.

Moreover, with the banking alleging that what it believes that the gold price is likely to continue benefiting from the ultra-loose monetary policy pursued by the ECB, many are anticipating that the price of gold will suffer a renewed setback in the summer months since the market is undermining the U.S. Federal Reserve’s interest rate hikes.

Lastly in Europe, last week’s pivotal meeting of the European finance ministers to discuss the future of the Greek bailout programme might provide a surprise to the markets while the outcome of the critical peace talks between Russia and the Ukraine is currently underway at the same time is also being closely monitored.