Gold Rebounds from 3-Year Low, Down on Week; US Gold Coins Up
New York (Dec 22) Gold bounced back above $1,200 an ounce and from its lowest settlement price in more than three years, but prices still finished sharply lower on the week and the metal is headed for its first annual decline since 2000.
Gold for February delivery added $10.10, or 0.8%, to settle Friday at $1,203.70 an ounce on the Comex division of the New York Mercantile Exchange. For the week, the precious metal slid $30.90, or 2.5%, with the Fed tapering decision pressuring prices and turning investors toward stocks.
"Money always goes where it’s well treated," Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion, said in an interview relayed on Bloomberg News. "If you were doing well in equities, you didn’t need to be in gold. As long as the economic data continues to gain traction, we should see the dollar rise and the Fed continue to taper. That’s typically negative for gold."
Gold started to fall in after-hours trade Wednesday after the Federal Reserve announced that it was trimming its monthly bond purchases to $75 billion from $85 billion. The decline continued into Thursday with prices falling $41.40, or 3.4%, to close at a level not seen since the summer of 2010.
Gold is poised for further losses next week, based on the majority of participants in Kitco’s weekly gold survey.
"In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of these, eight see prices up, while 11 see prices down and four see prices sideways or are neutral,." .
"Participants who see prices sliding further next week said the downward trend should continue to assert itself… Participants who see higher prices said they believe that year-end book-squaring will dominant market action next week. Since speculators are heavily short gold, there might be some of these traders who buy back these previously sold positions and that could lead to a temporary boost in prices."
For the year-to-date, gold has plunged 28.2% from its final 2012 close of $1,675.80 an ounce. Reuters notes that the yellow metal is on track for its biggest annual decline in 32 years.
