On Friday, gold prices fell further in electronic trade. So far, the yellow metal is set for a sharp, double-digit losses on monthly and quarterly basis.
Gold for August delivery gave up $10.50, or 0.9%, to trade at $1,200.30 an ounce. During the session, it hit an intraday low of $1,179.40 an ounce.
Gold prices remained on a downward spiral Thursday, although the decline unfolded at somewhat slower pace. Three Federal Reserve officials made comments to the media that the markets had overreacted after Fed Chairman Ben Bernanke’s remarks last week that the central bank may start slowing the pace of stimulus as early as the third quarter of 2013. Such a move, which was long expected by now, would be based on improvement in the economy that’s in line with the forecasts.
Speculation that the end of Fed stimulus would arrive sooner rather than later hit gold futures hard this month, as so-called quantitative easing has been credited for supporting a rally in gold in recent years.
In addition, a number of gold price forecast downgrades by a number of international investment banks added to investors concerns.
- Read more: Poor Gold! Investment Banks Strike Again
Gold needs either inflation or fiat-currency fears to do really well, and neither appears likely in the near term.
A few market analysts have reported that physical demand for gold remains strong. However, futures prices have continued to suffer, with the benchmark gold contract sliding 13.7% in June, and tumbling 24.8% over the second quarter.
Gold is currently on track for a weekly fall of more than 6%, building on last week’s decline of 6.9%.
September silver rose 0.2%, or 1.2%, to $18.79 an ounce.
