Gold futures for December delivery dropped 3.2% or $57 to $1,717.30 an ounce on the Comex division of the New York Mercantile Exchange by early afternoon on Thursday.
Bullion has been unable to to take advantage of its traditional role as a hedge against inflation and a safe haven during economic turmoil having repeatedly failed to breach the $1,800 an ounce level in recent weeks.
Gold’s weakness also flies in the face of new data from the World Gold Council showing investment demand at record highs and investment bank Morgan Stanley picking gold as its top commodity for 2012 and predicting a price of $2,200 an ounce in the first half.
MarketWatch quotes Darin Newsom, a senior analyst at Telvent DTN: “Gold isn’t paying attention to fundamentals at this time. It seems traders (not just in gold but other markets as well) have grown numb to the constant back and forth of European problems.”
Bloomberg quotes Peter Richardson, chief metals economist at Morgan Stanley Australia: “There’s a very strong chance that gold will re-challenge successfully the all-time high. Bullion may climb to a record $2,200 an ounce in the first half.”
According to the World Gold Council’s Gold Demand Trends report for the third quarter 2011 released today, demand reached 1,053.9 tonnes, an increase of 6% compared to the same period last year. This equates to $57.7bn, an all-time high in value terms. Read more on gold demand trends.
The increase was driven by investment demand which rose by 33% year-on-year to 468.1 tonnes, generating record quarterly demand of $25.6bn, and came despite a steep drop-off in Indian jewelry demand which was down 26% thanks to disappointing Diwali demand. Read more about disappointing festival sales in India.
Chinese jewelry demand was 13% higher year-on-year at 131.0 tonnes and topped Indian sales for the first time as Chinese jewelers expand outside the bigger cities. Read more about surging gold sales in China.
Comments
Wesely
These articles are so utterly dumb and clueless in the way they are written.
Note:-
“Bullion has been unable to to take advantage of its traditional role as a hedge against inflation and a safe haven during economic turmoil having repeatedly failed to breach the $1,800 an ounce level in recent weeks. …”
Whats wrog with this stament.
Well, gold is trading PLUS 1770.
The articule, in the big picture, is a non sequiter.
The reality is that with the events in Europe in the last 12 months there was a flight of currency from the Euro back to the US dollar, this year.
There was no where else for the Euro to go.
Gold’s weakness also flies in the face of new data from the World Gold Council showing investment demand at record highs and investment bank Morgan Stanley picking gold as its top commodity for 2012 and predicting a price of $2,200 an ounce in the first half.
The writer really is .