Gold prices hit a two-month high as Gold futures extended gains on Monday. The yellow metal extended gains were assisted by the weak US data and last week’s rise in the world’s biggest gold-backed exchange traded fund SPDR Gold Trust.
Gold futures rose 0.26% higher at $1,374.60 per ounce at the time writing, while silver lost 0.19% at $23.280 per ounce at the same time. Earlier today, Silver reached a three-month high at $23.605 an ounce.
The globe’s largest gold-backed ETF SPDR Gold Trust, posted an increase of 0.4 in holdings to 915.32, its highest increase since November 2012. Volume of the holdings in SPDR fell below 1,000 tonnes in June, lowest in over four years.
According to reports, this year the fund has seen approximately $19 billion in outflows, which has weighed on metal prices.
Analysts that attended the India Gold Convention last week are predicting precious metals could reach $1,405 an ounce by the end of the year. The World Gold Council said that the overall second-quarter gold demand dropped to its lowest value in over three years. Demand in gold dropped 12% and was down 23% in dollar terms, while the demand in jewelry remain strong, hitting a 37% high in tonnage terms.
The Investment Company Paulson & Co cut out 53% of its stake from the SPDR Gold Trust in the second quarter because of the lower bullion prices.
Economic data’s expected and released have been closely monitored by investors to gauge when the U.S Federal Reserve would begin to scale back on its bond-buying program later this year.
An economic data released last week showed that the jobless claims dropped from 15,000 to 320,000 in the week ending August 10, the US Department of Labour reported.
The US central bank’s monthly bond-buying program has helped gold prices to reach its highest record in the past years to improve and maintain the labour market. The bank’s Policymakers stated earlier this year that if the unemployment rate continuous to drop, they would consider when it would start to scale back on its $85 billion monthly bond-purchasing program.
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