Gold eased $1.60 to trade at 1210.70 after climbing yesterday on bargain hunting on low volume trading as many markets remained shuttered for the extended Christmas holiday. Commenting on gold outlook, Ekman Commodity Research, said, ”Gold prices are expected to move in range to lower as better than expected US unemployment claims along with Chinese buying and thin volumes can keep the prices in range.
Gold was little changed in thin trade this morning, heading for its biggest annual loss in more than 30 years as hope of a global economic recovery and rallies in equities dent its appeal as an alternative investment. Bullion has fallen more than 25% this year, hurt partly by the long-expected tapering of the US Federal Reserve’s bond-buying stimulus programme, which has been a key driver of gold’s rally in recent years.
Premiums in Singapore, a centre for bullion trading in Southeast Asia, were steady at $1.50 an ounce, with dealers watching the political drama in Thailand. Thailand’s government rejected a call from the Election Commission on Thursday to postpone a February vote after clashes between police and antigovernment protesters in which a policeman was killed and nearly 100 people were hurt.
“Indonesia has been quiet but it has exported a lot of gold in 2013 because of the weak currency,” said a physical dealer in Singapore. “I guess for Thailand, we will have to wait and see. I don’t think the protests will end unless there’s a consensus.”
While in the world market Gold is headed for a near 30 percent drop this year as the United States Federal Reserve is set to begin unwinding its stimulus measures ending a 12-year rally.
However, low volume during the holiday season could tend to keep the yellow metal volatile. Thursday’s gain of over $10 an ounce is an example of this trend. Investors’ interest is evident from further pruning of their holdings in gold-backed exchange traded funds. Gold holdings in SPDR Trust, world’s biggest exchange-trade fund, dropped further to 804.22 tonnes. It shouldn’t be surprising if the holdings drop below 800 tonnes before the year rolls out.
Silver on the other hand tumbled 91 points to trade at 19.825 after recovering this week from the low $19 price range. Copper declined by 15 pips to trade at 3.374 well above its recent trading range after an erroneous trade before the holiday pushed markets to 3.42 as traders adjust their positions and expect copper to fall back to 3.30-3.34 range. Industrial metals steadied on Tuesday with tighter near-term supplies underpinning prices amid thin liquidity. Japan’s output of rolled copper product rose to 67,751 tonnes in November on a seasonally adjusted basis, up 9.6 percent from a year earlier, preliminary data showed on Wednesday.