On the first day of April, gold was little changed below $1,600 per ounce. The metal traded flat as the euro weakened on constant worries about aftereffects from the Cyprus debt crisis. At the same time safe haven purchase remained passive despite the ongoing tension in the Korean region.
By 00:30 GMT, the yellow metal was trading steady at $1,598.00 per ounce. The commodity finished the first quarter around 4% down. This was after the stock markets jumped and the euro kept weak performance against the greenback.
The US gold was up by $3.10 trading at $1,598.80 per ounce.
The Chinese official manufacturing PMI was awaited by many anxious investors. The March factory activity index is projected to score an 11-month high. This in terms could propel a strong second-quarter start for industrial commodities. That brings the positive side as most of them fell in the first three months of 2013.
During the recent months the revived confidence in the global economy has boosted equities higher. Meanwhile, investors avoided the traditional run into safe haven assets such as gold.
Though, in recent months, central banks in key emerging markets persistently raised the volume of their gold reserves. In March South Korea announced a 20 tons gold purchase. In addition, Russia and Kazakhstan made substantial purchases a month earlier.
According to the World Gold Council, in 2012 gold purchases by central banks around the world came in at 534.6 tons. This is the highest level since 1964. The level is 17% up on a year over year basis.
During the weekend, an official from the U.S. Federal Reserve said that the bank will sustain its asset buying program till a vivid jobs market rebound appears. In respect, such increase is not expected at least until the turn of the 2013.
The bank of Japan is also expected to run into aggressive asset purchases. That is to reach the Japanese target of 2% inflation in order to end decades lasting deflation. At the same time, the European Central Bank is also believed to cut rates. This would be an attempt to support flagging economies in the Euro Zone.
In respect we can expect better performance of gold during the second quarter of 2013. All the positive drivers and factors are yet on the table. Therefore it is probably a matter of time before the yellow metal earns back its luster.
