Gold prices report on 8th May
Gold prices were falling gradually during last week. However, they ended up strong enough to create very favorable purchase conditions.
Find out how gold prices evolved in this weekly report.
The week started with gold prices falling to $1,257 an ounce on May 2nd. Tuesday saw the global bullion market getting back to work after the long Labour Day holiday. Several gains on the world's stock markets were also detected on that day.
Gold prices fell slightly the next day to $1,256 an ounce while the US dollar increased its value. There were doubts about the direction of gold prices due to the Federal Reserve's meeting that evening, but May 3rd was outstanding mainly because gold sales rose in India by 30%. Even though gold prices fell in the rest of the world, the festive gold-buying season of Akshaya Tritiya was quite significant for the gold market.
May 4th was not better for gold prices, but it was very much so for the demand for gold. The US Federal Reserve decided not to change interest rates, so gold was priced at $1,240 an ounce. However, new data from the World Gold Council revealed that the “demand to buy gold coins and small bars for investment saw its strongest first-quarter since 2013”. The institution's head of market intelligence Alistair Hewitt also added the following:
“Demand for gold bars and coins is strong in No.1 consumer market China […] fueled by concerns over potential currency weakness and a frothy property market."
New data appeared also on May 5th: unemployment in the US was at its lowest in 16 years. On the other hand, the world's stock markets increased their gains, which led gold to be priced at $1,234 an ounce that day. Nevertheless, the German financial group Commerzbank was not pessimistic about gold prices: "We expect a stabilization and counter-movement."
On Monday 8th and once the weekend was over, currencies such as the Euro strengthened after the result of the French presidential elections; and gold firmed at $1,234 an ounce. In Asia though, physical gold demand rose to 59.24 million ounces. What is behind this impressive amount? Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo, clarifies it:
“Gold is still pretty much wanted after last week’s fall... People are happy to buy around this level.”
Everybody is seizing these favorable purchase conditions.