During the last week’s trading sessions, investor’s sentiment once again remained under pressure with the debt crisis in the Euro zone escalating after disappointing bond auctions.
However, coordinated actions from central banks to boost liquidity, along with a cut in the reserve requirements in China, pushed spot gold to a two week high.
A slide in the USD following the central bank‘s announcement also encouraged investor to increase their holdings, pushing the spot prices higher on Wednesday.
Altogether for the week, spot prices gained approximately 3.0%, comparatively the most active February contract on the Comex division increased 3.72% for the week.
Despite the increase, investors remain concerned about the yellow metals performance as it continues to track riskier assets, loosing the safe haven characteristic it once exhibited. Though gold prices were supported on revived inflation talks after China cuts its reserve requirements.
The early Christmas gift presented by the world’s central banks along with positive U.S. employment data release last Friday will most probably favor a “risk-on” sentiment which could drive prices higher in the coming week.
In addition, plans by ECB to pump money into the IMF to help the struggling European nations also kept the prices buoyant.
