In the first day of this trading week gold futures gained back in Asian time. Investors gave back by pushing back the low last seen last July and giving firm support to the metal.
This Monday in electronic trading during Asian time yellow metal for delivery in April climbed $9.70 to trade at $1,582.50 per ounce.
Last Friday on the Comex division of the New York Mercantile Exchange the precious metal lost $5.80 falling by 0.4% to close the week at $1,572.80 per ounce.
In respect the gold prices closed the market at a 2.3% decline. That was the lowest settlement level last seen on 18th of July in most active contracts.
The strongest driver which caused negative effect on the commodity was Federal Reserve Open Market Committee meeting that took place last Wednesday. During the past week the minutes from January’s were released. The posted data suggested that the Federal Reserve may reduce or even stop its massive asset- buying program really soon.
According to experts the interconnection between the yellow metal and risky assets has decreased. Though, the gold correlation with US treasuries has increased. Add to this the market volatility brought by the meeting minutes. These factors all together contributed to a seven-month low in gold pricing.
In addition the precious metal weakened its recent performance on improvements in Asia. India increased it demand while China raised the volume of its gold purchase.
The commodity prices failed to offset the weakness on the investment side. Therefore gold struggled to find a cushion from the physical market.
Analysts stressed that in February net redemptions have accelerated. Best performance had SPDR by ending its weakest daily session since August 2011. The biggest gold exchange-traded product showed 21 tons of net redemptions.
This week the market attention will be put on non-farm payrolls data and the US debt- ceiling vote.
