Gold Price

Gold Prices Show Little Change Over Week, Coin Premiums Flat From Prior Week

Written by Economic Calendar     August 12, 2016    

After a rangebound session, gold futures ended lower on Friday, and over the week the yellow metal declined a marginal 0.09% to mark its fourth weekly decline in the last five.

After a rangebound session, gold futures ended lower on Friday, and over the week the yellow metal declined a marginal 0.09% to mark its fourth weekly decline in the last five.

The metal initially had some upside movement during the session after some disappointing economic data from the US sparked the sentiment that the Fed may hold-off of interest rate hikes, but the commodity ran into technical resistance around $1,350 per ounce. It closed the session at $1,343.20.

Gold coin premiums were unchanged this week. According to Golddealer, premiums on the American Gold Eagle coin were $51 over spot the equivalent to a week prior, but overall investment demand for gold saw its best first-half on record.

On Thursday, the London-based World Gold Council (WGC), reported that investor demand in the first half of the year hit a record. Investment demand for the metal was 1,064 tons between January and June, 16% higher than in 2009, the previous record for the first-half. Investor demand was up 127% year-on-year. Most of the investor interest went into ETFs, while demand for jewelry slowed due to the higher gold prices.

Looking forward to next week, if gold cross and hold above the $1,350 price point a rally could ensue. Interest in gold is still circulating, but bidding activity is somewhat quiet due to holiday season. The kick-off of festival season in India will provide further insight into the demand for jewelry, either supporting that high prices are hurting demand or that Indian consumers are still willing to spend the money on prized gold jewelry. Either outcome will be a market driver. Expectations are for good demand after monsoon rains boosted crops in the country, making people flush with cash, and ready to buy gold.












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