Gold Price End Slightly Higher but Logs Worst Weekly Performance in almost 2 Years; Silver Prices Also Gain
Gold prices settled higher on Friday after plunging to more than two and half year low level in the previous session; nonetheless, the metal has clocked worst weekly performance in almost two years after the Federal Reserve signaled that the era of easy-money could come to an end by the second half of the next year. Silver prices also edged higher in trading on Friday.
Gold futures for August delivery gained $5.80 or 0.5% to $1,292.00 an ounce while spot gold was last up 1.44% to $1,296.10 an ounce.
Earlier during Asian trading hours, gold prices staged a slight comeback as bargain hunting ensued after yesterday’s tumultuous trading in which the metal plunged more than 5%. Demand mainly came from the world’s second largest gold consumer, China.
Moreover, relatively stable global equity and commodity markets also helped the metal to find some support.
Gold Prices were knocked off on Thursday after the Federal Reserve said that it could start winding down its bond purchase program towards the end of this year and completely halt it by the second half of the next year, should the U.S. economic indicators continued to show signs of improvement.
However, any gains for gold in the near future look unlikely given the fact that there is no inflationary pressure even as the Fed appears to have adopted more hawkish stance.
“Bullion will seek to consolidate near current lows, but there is little chance for a sustained rebound…We had little evidence of physical buying—spooked market participants will stay away,” said VTB Capital analyst Andrey Kryuchenkov, according to Reuters.
“Inflation is subdued, seasonal Asian demand is yet to pick up, the greenback is stronger, the opportunity cost of holding gold will start gaining soon,” added Kryuchenkov.
Silver futures were last up 1.02% to $20 an ounce.