(Reuters) – Despite Friday’s decline in gold price, the yellow metal recorded a 6.5% gain in value during February 2014, the biggest monthly gain since July 2013. Safe-haven demand increased as investors worried about the pace of U.S. economic recovery.
Gold price in the spot market fell by 0.24% to close Friday’s trading session at $1,319.30 per ounce. While COMEX gold futures for April delivery settled down at $1,321.60. Gold recorded a 4-month high at $1,345.35 on Wednesday.
The latest U.S. economic data showed a loss in economic growth momentum. The U.S. government lowered expectations for 4th quarter economic growth. Moreover, the latest Chinese economic data suggests a slowdown in growth, and signs of economic weakness.
Premiums on gold bars in Hong Kong and China were used to reflect physical demand in Asia. Premiums in Hong Kong were low around $1 per ounce. Last week, premiums on gold bars were at $1.70 above London spot price. Lower premiums reflect weaker demand from China mainly.
Another reason for gold price to hold ground is the crisis in Ukraine. It’s well known that demand on gold increase when political tension rises. The situation in Ukraine is a clear example. Tension in Ukraine involves Russia, the U.S. and the European Union, all are major economic powers.