Gold Gets A Blow Post GFMS
LONDON (Sept 12) Gold futures were blown lower after update from leading precious metals consultancy Thomson Reuters GFMS (Gold Fields Mineral Services) in which it said gold prices will end lower for the second year in 2014 after having a decade long bull run.
In an update to its Gold Survey 2013, Thomson Reuters GFMS said the market could beat a retreat below $1,300 towards the end of 2014 as US monetary stimulus is withdrawn, fuelling talk of rising interest rates. The consultancy expects prices to average $1,350 next year, down 7 per cent from $1,446 in 2013, with support seen between $1,200 and $1,250.
Gold prices have fallen by around a fifth this year, hitting a three-year low in June of $1,180.71 an ounce, after the Fed signalled it would start tapering its bond-buying programme by the end of the year, with an aim to withdraw it by mid-2014.
Global gold demand will fall to 2,237 tons in the second half from 2,309 tons in the same period a year earlier and 2,533 tons in the first six months as bar buying drops from a record and central banks add less, Thomson Reuters GFMS said.
China's gold market has grown at a blistering pace in recent years, helping fuel a rally in gold prices to a record $1,920.30 an ounce in 2011. The country is poised to overtake India's position as the top gold consumer by as much as 100 tonnes this year, GFMS said.
Indian jewellery fabrication jumped by 25% in the first half to almost 350 tonnes. But demand is now expected to fall as the Indian government introduced a series of measures to curb gold imports, due to their contribution to the country's expanding trade deficit.
International December gold futures trickled down by more than $20 to hit the low of $ 1340.3 an ounce on the Comex division of the New York Mercantile Exchange.
Precious metal traders are now focusing on the upcoming FOMC meeting which will begin on the 17th. Gold has declined 19% this year amid expectations that the Fed will pare its $85 billion a month of bond-buying as the economy improves.
Thursday’s data on weekly jobless claims may offer the next clue on whether the U.S. central bank will decide to taper its bond-buying program at its two-day monetary-policy meeting next week.
MCX October gold futures slipped below Rs 30300 levels today. The metal may soon revisit the Rs 29- 28 thousand level with the shraddha or Pitru Paksh coming in picture in the month of October.
