Investor Demand for Gold Down Some

Tuesday, 26 March 2013
Written by  Bloomberg
Published in Gold Investing
Investor demand for gold dropped for a third straight day, as the rescue bailout of Cyprus has both investors and traders laying off the yellow metal right now. Gold will need to make a couple of moves back up in price over the next few days if it wants to finish the week up overall.

Fiscal-Cliff

Gold already fell quite a bit yesterday as Cyprus agreed to a bailout. European Central Bank executive board member Benoit Coeure said the ECB will do everything it can to preserve the currency and that the rescue isn’t a model for the rest of the region. Mongolia and Kazakhstan were among nations that raised gold reserves last month, International Monetary Fund data show.

“A deal between Cyprus and European leaders has reduced safe haven demand for gold,” Mumbai-based Kotak Commodity Services Ltd. said today in a report. “Market players remain concerned about health of euro-zone economy and this has limited downside.”

Gold for immediate delivery fell 0.5 percent to $1,596.43 earlier today. Futures for June delivery were 0.6 percent lower at $1,597.30 on the Comex in New York. Futures trading volume was 14 percent above the average in the past 100 days for this time of day.

The yellow metal continues to hover in the range of $1,575 - $1,610, or around there. It has had a hard time climbing back up over the psychologically important $1,600 per ounce price mark, and when it has the yellow metal has not been able to stay above it for long.

While gold is heading for the first monthly gain since September, the metal is still set for the first back-to-back quarterly loss since 2001. Prices are down 4.7 percent this year amid signs the U.S. economy is improving and as Federal Reserve policy makers debated the pace of stimulus.

With that being said, the yellow metal will need to really catch fire at some point this year if it wants to make a 13th consecutive year ending with an overall gain. Will that happen? Only time will tell.

Many analysts still think that gold will catch fire sometime in 2013 and make a run at the $2,000 per ounce price mark. However, we have been waiting on this move for a while now, and it has repeatedly been pushed back over and over, as analysts can’t seem to really pinpoint a time when gold could make that historic run.

Original Article: Bloomberg

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