On Monday in Asian trading hours, gold futures continue to climb. Prices gained back what they had lost over the last session. Meanwhile, the weakening US dollar boosted precious metal buying.
Spot gold price rose by $6 to trade at $1,468.90 per ounce. Gold futures for delivery in June jumped by1.1% adding $15.70 to trade at $1,469.30 per ounce.
The rebound came right after the losses on the prior trading session. Last Friday on the Comex division of New York Mercantile Exchange gold futures lost $8.40. The last week the shiny metal made it first advance in a month with gains of more than 4.2%.
At the same time SPDR Gold Trust exchange-traded fund in Hong Kong traded units inched higher by 0.5%. At the start of the week the ETF gain saw support from the further falling US dollar. The ICE dollar index measures the dollar strength against a basket of six major global currencies. On Monday by mid-afternoon in Hong Kong the index fell to 82.326, while late on Friday in US it stood at 82.484. It is a well known fact that weaker dollar supports gold prices by making them cheaper for non-dollar currency holders.
Meantime, market analysts underlined the growing demand for physical gold. According to an economist at HSBC, India is likely to propel the gold imports volume after the recent price crash. On Friday HSBC trimmed again its 2013 gold price forecast from $1,700 to $1,542 per ounce.
Gold also found support from the recent disappointing US growth data. The bleak numbers gave hopes that Federal Reserve would sustain its current pace of bond buying at $85 billion per month. In respect gold’s role as a hedge against inflation earned back its luster.
Despite the solid demand, investors are still worried by the very recent price slump. The speculated dilemma is how sustainable is this present physical buying. That is because at the same time, there are still funds flowing out of the gold market.
