Gold eased by $2.00 to trade at 1301.50 after last evenings comments from Federal Reserve Director Janet Yellen. Gold futures settled with a gain today as traders assessed a speech from Federal Reserve Chairwoman Janet Yellen. Gold ticked up 0.3 percent to finish at 1,303.50 after touching a low of $1,293.50. In a speech to the Economic Club of New York on Wednesday, Yellen said that central bankers and many economists see a return to full employment and stable prices by the end of 2016. That baseline is “quite plausible,” she said, but still two years away. While gold ended a 12-year bull run in 2013 on expectations the Federal Reserve would reduce stimulus as the world’s largest economy recovers, prices have rebounded 8.5 percent this year as unrest in Ukraine spurred haven demand. Gold held steady just above $1,300 an ounce on Thursday supported by tensions in Ukraine, but the metal was at the risk of adding to recent losses as the world’s biggest gold-backed fund saw its sharpest outflow in nearly four months.
Holdings in SPDR Gold Trust fell 8.39 tons to 798.43 ton- the biggest outflow since Dec. 23, indicating waning investor interest. China’s annual demand for gold could jump around 20 per cent by 2017 as more of its increasingly wealthy population seeks new ways to make money, the World Gold Council predicts. The forecast by the World Gold Council (WGC) comes after China became the world’s largest gold-consuming nation in 2013, overtaking India.
Annual demand for gold in the form of jewelry, coins and bars is set to hit “at least 1,350 tonnes by 2017″, the WGC said in a report on China. That would represent a rise of nearly a fifth from the country’s record consumption of 1,132 tonnes last year.
In other metals yesterday, silver increased 0.7 percent to $19.63 an ounce. Copper prices climbed following data showing China’s economy slowed somewhat less than feared. High-grade copper increased 1.3 percent to settle at nearly $3.03 a pound. Palladium added 0.8 percent to 802.30 an ounce, while platinum declined 0.5 percent to 1,437.80 an ounce.
Thursday morning saw silver tumble to 19.553 giving up 81 points while copper reversed losses to climb by 9 points to trade at 3.038 as the metal markets remain mixed and confused in the Asian session. Gold prices drifted quietly lower in Far East trading on their Tuesday until around 2 p.m. Hong Kong time. Gold trading was halted, as gold gapped down $12 in an instant, as 4,000 contracts were dumped in seconds. In less than three minutes it was all over.
China, the market for nearly 40% of the world’s copper, said its economy grew by 7.4% in the first quarter, slower than the last three months of 2013 but above analysts’ forecasts. The number boosted investors’ confidence that China will maintain growth rates around 7.5% for the year.
Wednesday’s bounce comes on the heels of a 2% drop in copper futures the day before, as traders bet against the industrial metal ahead of the Chinese data.
Copper has been one of the worst-performing commodities in 2014, with futures down 11% in the first quarter. The losses came as many investors bet that an economic slowdown in China and sluggish growth in the U.S. would dent global demand for copper and sold, or shorted, copper futures. Prices for the industrial metal have crept higher in recent weeks after China announced some stimulus measures to boost economic growth. Meanwhile, production shortages in key mines have taken the edge off worries regarding an anticipated supply glut later this year.