Gold near 6-week low; headed for first monthly decline this year

Singapore (Mar 31)   Gold was trading near a six-week low on Monday, and was headed for its first monthly
decline this year on growing optimism about the US economy and weak physical demand in Asia.

Gold has lost nearly $100 an ounce in the last 10 trading sessions, moving further away from a six month high hit mid-March.

The metal's safe-haven demand had been bolstered earlier in the year when fears over economic growth in the United States and emerging markets hurt global equities, and tensions between Russia and the West were high.

"Prices will go down further since those factors supporting gold in the first quarter are weakening now, such as geopolitical issues, and the emerging markets crisis," said Chen Min, a precious metals analyst at Jinrui Futures in Shenzhen.

Physical demand in Asia could pick up if prices fall to $1,180-$1,200, Chen said.

Spot gold fell 0.1 per cent to $1,291.80 an ounce by 0706 GMT, not far from a six-week low of $1,285.34 hit on Friday. It is down nearly 3 per cent for the month.

Recent US data has been strong, indicating that the economy is recovering well  after severe weather conditions.

 Federal Reserve Chair Janet Yellen  indicated earlier this month that interest rates could rise in the first half of  2015. Low interest rates, which cut the opportunity cost of holding non-yielding  bullion above other assets, had been an important factor driving bullion higher  in recent years.

Source: economic-times