Last week, gold was poised to close lower for the second consecutive week, following three successive weekly gains, with a cumulative average just below 3.0%.
Gold spot prices retreated 4.16% and were moving in a sideways manner through majority of the trading sessions. Rising U.S. dollar remained the driving factor that shunned investments away from the precious metal.
As a result, demand from India remained suppressed, hence reducing a major source of support for the price. Looking ahead, investment demand from central banks is expected to keep the bullion price buoyant.
Data released by the IMF shows central banks have purchased gold worth 230.25 tonnes so far this year, with India and China yet to add to their reserves.
Analysts expect the yellow metal to be lifted higher with the two Asian power heads being the next in line to expand their gold reserves.
A disappointing Italian bond auction on Friday exacerbated Europe’s on going debt crisis pushing gold lower for the third day in the week.
For the first time since late September, gold prices peaked above the $1800 mark in early November. However, since then they have moved along a downtrend, declining almost 1.85% for the month so far.
