Gold ends flat over week as investors prefer equities
London (Mar 1) Gold closed the latest week flat as traders preferred to invest their money on US equity markets, which consequently traded at multi-year highs.
The precious metal closed the week with a 0.13% advance to $1,325.30 per ounce, compared with the previous week's close of $1,323.60 an ounce.
During the week, bullion hit its low of $1318.70 an ounce on Monday, before jumping to reach its weekly high and also a four-month high of $1345.60 an ounce on Wednesday.
Meanwhile, gold is down 28% over the past year due to the Federal Reserve's (Fed) decision to start trimming its quantitative easing program and due to outflows from gold-backed funds. However, since the start of this year, the metal has recorded a 10% rise.
Weekly fundamentals
On Tuesday, demand for gold was boosted after US consumer confidence dropped more than analysts had expected in February, reaching 78.1 points, compared with a downwardly revised 79.4 posted in the previous month.
In afternoon trading on Wednesday the yellow metal retreated from its previously hit four-month high and posted a steep fall due to profit taking and a higher US dollar.
Moreover, on Thursday durable goods orders in the US declined for the second month in a row, albeit at a slower pace, while initial jobless claims edged higher in the week ended February 22
The biggest driver on the economic front came on Friday in the form of the second estimate of US gross domestic product that showed a 2.4% expansion for the fourth quarter, much lower than the 3.2% reported in the previous estimate. Analysts had been expecting a 2.5% growth. However, gold showed no reaction to the data.
Yellen's speech
Fed Chair Janet Yellen testified before the Senate on Thursday, saying that the latest poor US data were probably caused by the extreme cold and snowy weather in large parts of the country, while adding it was too soon to say for sure what impact the weather had on the recent data.
She also stressed that the Federal Open Market Committee would watch "broad measures of labor market conditions" before raising the policy rate.
Source; wbpOnline
