Strong Demand and Weak Gold

Gold jewlery and Coins

Gold continues its free fall for the seventh session, the longest decline in gold price for 4 years despite the strong physical demand on the precious metal. The USD gaining strength in the first quarter this year and equities gaining was the main reasons behind the outflow of cash from the gold market.

Fears of an early exit from the QE programs the feds adapted, and the strong U.S. economic data supported equities and the USD, which had a negative effect on gold price.

Gold price fell to $1,372.10 per ounce at 08:45 NY Time. Liquidation of gold ETFs continued today as well.

The Asian physical demand calmed today, waiting for the prices to stabilize or ease-up a little bit more.

Gold bars premiums rose in India to reach $5 an ounce, and $20 per kilo in mainland China and Hong Kong. These are new high record premiums in both countries.

Despite the news of gold demand failing this quarter, the global jewelry demand rose in Q1 2013 by 60.2 metric tons compared to Q1 2012. While the global gold bullions and coins demand increased in Q1 2013 by 35.2 metric tons compared to Q1 2012.

Gold ETFs liquidation affected SPDR Gold Trust physical gold holdings, as it is the world largest gold ETF. It fell to 1041.42 tonnes of gold yesterday.