Gold losing worth, turns to china for hope

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Gold trade on Friday registered minute volume changes and it is being predicted that gold stocks are headed for a third consecutive week of loss as a strong dollar and waning investor confidence are damaging market sentiments, while the only buffer is a slight increase of buying in Asia.

The dollar index hovered near a six-month high hit in the previous session and risk appetite was hurt by political uncertainty following Italy and US government spending cuts. The US dollar attracted safe-haven inflows, but that weighed on dollar-priced commodities.

Buying by China helped support prices, as the popular gold forward contract traded on the Shanghai Gold Exchange is running about $20 an ounce higher than the international market. Wing Fung Precious Metals Hong Kong head of dealing Peter Fung said that “Prices firmed up a little after the Shanghai market opened, although physical buying has been flowing in, investment interest in gold has been on the wane. We don’t see much interest from funds and other investors, who are attracted to the stock market right now, as they are generally more confident in the economy.”

Holdings of the SPDR Gold Trust, the world’s top gold ETF, dropped to a nearly seven-month low of 1,254.49 tonnes on February 28 in its eighth straight session of decline, finishing February with a record monthly outflow of 73.606 tonnes.