Gold Spot Price $1275 +0.70    Silver Spot Price $14.44 +0.01    Platinum Spot Price $808.00 -7.00    Call Our Gold Bullion Hotline at 800-300-0715 For Live Quotes On Gold Coins And Bars - Always Free, Insured Delivery.
main image
Recent Drop in Gold Seen as Short-Term Speculators as Asian Buying Picks Up

Recent Drop in Gold Seen as Short-Term Speculators as Asian Buying Picks Up

October 25, 2012Gold bullion traded at or near 7-week lows in U.S. and London markets as investors coped with a 1 percent drop for the week.

In spite of reports out of Greece that the Mediterranean country will allow another two years in order to meet its austerity budget targets, the euro currency maintained a drop below $1.30 after new German data indicated consumer confidence has fallen to a 32-month low.

The 17-nation Eurozone dropped further into decline at the start of the fourth quarter, according to the Markit PMI survey, which attributed the drop in manufacturing and service output as occurring at the fastest pace in more than three years.

Tuesday’s drop in gold bullion prices arrived amid a market-wide retreat, according to one analyst, with across-the-board selling by speculators, many of which entered the gold market in order to make short term gains following the recent announcements of an open-ended stimulus policy by the Federal Reserve.

The Dow dropped 252 points on Tuesday, spurring the same speculators to pull their positions in precious metals to fund their margins within equities.

Nomura analysts reported in a note that the reduction in short-term speculative positions suggests that the recent move lower in gold has been related to short-term investors.

Ironically, the price drop has spurred buying in markets that have been on the sidelines waiting for higher prices, and their jumping into the market may be enough physical demand to push gold prices higher.

India, the world’s largest consumer market for gold, is preparing for next month’s Diwali festival which marks the peak of annual demand. Dealers reported bargain hunting by jewelers and other sellers, according to the local press.

The low prices lured jewelers back into the markets as buyers after India’s gold demand has been under pressure from record-high domestic prices with the Indian rupee weakened against the U.S. dollar. Gold traded in dollars is more expensive for holders of the rupee, in addition to taxes imposed by the government.

U.S. gold for December delivery gained $14.50, or 0.9 percent, to $1,716.10 per troy ounce on the Comex Division of the New York Mercantile Exchange on Thursday after futures reached their lowest levels in seven weeks on Wednesday.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

Get Your Complementary Award Winning Guides Below

 Publish Real Money Magazine

 Publish Gold Investment Magazine

 Publish IRA 401K Kit Magazine

 Real Money Magazine

Call Our Bullion Specialists Free Info On Gold Bars Gold Bullion IRA Gold Bullion Depositories
RSS Big Icon