GOLD PRICES headed for their lowest Friday close in 12 weeks in London today, trading sideways at $1281.31 per ounce on Friday morning as Fed Chair Yellen speaks later this afternoon.
Silver recovered little from its 11-week low this Thursday, trading at $19.53 per ounce on Friday morning. Both gold and silver price touch their lowest level within two months.
The American stock markets rose, whereas the European indices slipped as the Dollar held on to its strong position.
Crude oil was on track on Friday and continues its one month drop as Russia sent its lorries into Ukraine after more than a week.
The world’s largest gold-backed exchange traded fund SPDR Gold Trust (NYSE Arca: GLD) increased its holding on Thursday to 800.08 tonnes, the third increase this week.
“Gold was on the defensive right after the Fed minutes,” according to Commerzbank, “Key support remains between $1270 - $1275. A break of those levels and we could see $1240 in a short amount of time.”
“The move is bearish and opens up a full retracement to the 1240 low from June 3rd,” agrees Scotia Mocatta’s daily update note.
“(Gold price) has been unable to sustain recent moves above $1,300,” said analyst Tom Kendall from Credit Suisse.
Credit Suisse continued in their note: “Geopolitical headlines have not been sufficient to draw in consistent new buying, and physical flows into Asian markets remain uninspiring but clearly the motivation to short the metal is also subdued at present.”
Gold prices in Shanghai – the central market for the world's No.1 consumer nation – extended their $2.86 per ounce premium above the London quote of $1279.45.
Meantime in Taiwan, the gold bullion demand made a 36.45% jump from 2013’s first half of 7.05 tonne to this year’s first half of 9.62 tonne.
Over in India, Finance secretary Arvind Mayaram yesterday stated that the curbs on gold imports will not be eased any time soon. The rule imposed last year made it mandatory that a fifth of all bullion imported had to be exported.
“Markets are awaiting Fed Chair Yellen’s speech at the Jackson Hole Symposium. The price action suggests expectations of Yellen sticking to the ‘lower for longer’ script, reiterating that there remains considerable slack in the labour market.” comments ANZ Commodity Daily.