Friday, 03 April 2015 18:09

Gold Retreats After Hitting Three Months High

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Gold retreats after hitting three months high as demand falls at increased prices and before Fed meet. The metal fell by 0.65% to $1320.33 at 0900 GMT.

Today Gold made high of $1332.31/oz in early morning at Asian market on weak U.S. economic prospect. The metal gained near to 4% in last week and entered into the list of top performing commodities of the month. Gold provided return of 5.29% in a month.

It is always observed that physical buying falls if Gold prices gain continuously. We are considering this as a break in rally. It could be because of Fed meeting that may further reduce bond buying pace as said by new chair person Jenet Yellen. But weak U.S. economy and moderate global growth is not expected to reduce demand for precious metals. In fact investors are willing to buy more gold in this economic scenario.

According to World Gold Council Globally, consumers bought 3,864t of gold last year, 21% higher than in 2012. Jewelry demand for the year rose 17% to 2,209t, while investment in bars and coins was up 28% to 1,654t. Across the world there were large increases in consumer appetite for gold in both emerging and developed markets. Demand in Turkey was up 60%, Thailand up 73% and the US up 18%.

There was high outflow from Gold ETFs in last year. In total, investors redeemed 881t from ETFs in the full year said WGC Report. As on 14th Feb Gold ETF holdings fell by 152k to 55.9M as investors sold their stake on long lasted rally.

Demand is likely to slow down for short time but again there may come bullish trend in the market.


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