Gold price set to log biggest intra-month drop since September
The price of gold has declined so far in today’s session, trimming its first weekly advance in over a month, as the precious metal remains on course for its steepest monthly fall since September. During today’s trading, support for bullion from physical demand in China was offset by a strengthening US dollar as speculation over a hike in US interest rates continued to weigh.
Gold for immediate delivery had lost 0.26 percent, or $3.12, to be at $1,205.86 as of 09:34 GMT, and was trading about two percent below its 50-day simple moving average of $1,230.89. Despite today’s decline, the precious metal remains set for a 0.31 percent weekly gain. On a monthly basis, bullion is down some six percent, its biggest monthly drop since September.
According to FastMarkets analyst Will Adams: “The precious metals strode out early yesterday and that looked potentially quite bullish, but then retreated when the stronger US core CPI data came out that strengthened the dollar. So for now, the markets are consolidating and it seems likely they will be driven by the dollar today.”
On the COMEX in New York, gold for April delivery had shed $2.9, or about 2.3 percent, to $1,205.9 per ounce as of 09:12 GMT. The contract has tumbled 7.8 percent from January’s five-month high of over $1,300, as speculation over a hike in US interest rates sapped bullion’s safe-haven appeal.
The precious metal has managed to find support around the $1,200 level, partially due to the return of demand from China. Premiums on the Shanghai Gold Exchange have remained about $4 an ounce over the global spot price, Reuters has reported, easing slightly from earlier this week after Chinese buyers returned to the market following the 18-24 February Lunar New Year holiday.
The London-based newswire cited Chen Min, an analyst at Jinrui Futures in Shenzhen as saying: “The downside risk for gold is quite limited because buying interest from emerging markets like China will support the price at low levels”.
