• Wednesday, May 22, 2024
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BusinessDay

Spot gold up more than $100 since April 16 low

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 Gold rose more than 2 percent on Monday, supported by strong physical buying after last week hitting a two-year low, but investors reduced holdings of bullion in the top exchange-traded fund to the lowest in nearly three years, according to Reuters report.

Spot gold rose more than 2 percent to a session-high of $1,438.66 per ounce, more than $100 higher than a two-year low of $1,321 hit on April 16. It had trimmed those gains to $1,419.04 per ounce by 1430 GMT, up 1.1 percent.

Gold posted its biggest-ever daily loss in dollar terms last Monday, shocking investors who have used gold as protection against inflation and other market risks.

The technical outlook for gold, which is down more than 15 percent this year, has yet to improve despite the physical buying in Asia and elsewhere.

But while investors fled the market, the price fall has released years of pent-up retail demand in the past week. Parents buying dowries, casual shoppers and tourists have snapped up bars, coins, nuggets and jewellery.

“Physical demand is giving the price a psychological boost, but don’t think that could make up for the 65-tonne outflows from ETFs last week,” Saxo Bank senior manager Ole Hansen said.

“The market is obviously looking for someone to show an interest to buy at these levels but it’s quite a traditional set-up that we have a sell-off and then tentative recoveries the following days.” The U.S. Mint reported sales of gold coins to the public of 167,500 ounces so far in April, the highest level since May 2010, Barclays said in a note to clients.