Reported by Reuters on May 27, gold increases on Monday, advancing from a move in funds out of equities as worries over global economic development raised bullion’s safe-haven demand and overextended its improvements following its best week in a month.
The latest drop in gold prices as well kept physical demand for the yellow metal high in Asia with sellers fighting to hold onto pace with orders. Gold prices remained nearby $150 cheaper paralleled to levels just before a sell-off in mid-April.
Spot gold increased 0.6% to reach $1,393.56 an ounce by 0752 GMT, after climbing by 2% last week.
Gold is still down approximately by 17% this year. Yet, after last month’s retreat pressed prices down to a two-year low of $1,321.35.
Gregor Gregersen of Silver Bullion Pte Ltd, a gold and silver dealer in Singapore stated “Since prices have been going down, we have seen almost 300 percent increase in sales,” Gregersen said traders were struggling against the difficulty in meeting demand as supplies were snug.
Premiums for gold bars gained a record high in Asia among the snug supplies last week as lower spot prices appealed buyers, mostly in China, the world’s second biggest consumer of gold after India.
Barclay’s analyst Suki Cooper put pen to paper “Although the physical market has countered the negative investment interest in part, we believe exchange-traded product outflows are set to continue unabated,”
Holdings in SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, on Friday ran below 0.24% to reach 1016.16 tons, their lowest in more than four years.
Separately from persistent ETF losses, signs that the Federal Reserve could bring down its bullion-friendly bond buying as the U.S. economy increases momentum were as well possibly to control gold’s gains.
Federal Reserve Chairman Ben Bernanke last week upturned the possibility of slowly decreasing the U.S. central bank’s $85-billion monthly bond purchases if the labour market enhanced in a sustainable way, and cautioned of risks to holding interest rates very low for too long.
U.S. gold jumped by 0.43% to reach $1,392.50.
Asian stocks got off to an unstable start this week, with Japan’s Nikkei dropping more than 3% as investors concerned that a short period of profit-taking had rotated into lasting fears about economic progress and larger desires for risk.