The price of gold slipped to a 3-1/2 month low on Wednesday by adding to tapered losses during the night fears of demand slowdown in top consumer China and such as solid economic data from U.S. investor-attractive hedge dulled metal.
Spot gold fell to $ 1,260.74 an ounce, its lowest level since early February, before stabilizing at $ 1,264.70 by 0635 GMT. The metal crept 2.3 percent in the previous session – its larger decline from December a day.
The gold had been largely constant in recent weeks, and the technical analysts quoting its recent chart formation flag, aka a banner for its triangular shape, which represents a quick strengthening with price ranges taper before previous market movement will resumes.
Experts said, weak demand from China was also worrying.
The trade data on Tuesday showed that the Chinese gold imports through Hong Kong major dropped to a 14-month low in April as imports of the banks were properly stored amid lower demand and the weaker yuan.
Demand from China could not pick up on Wednesday despite the nightfall in spot price.
“We have had a price cut of $ 30 and still no increase in premiums of China. That is not favorable,” they added.
Prices for 99.99 percent pure gold in Shanghai Gold Exchange was approximately $ 2 – $ 3 an ounce beyond the world prices, little changed Tuesday premiums.
In Delhi, gold of 99.9 and 99.5 per cent purity plunged by Rs 400 each to Rs 27,700 and Rs 27,500 per ten grams, respectively, a level last seen on July 22 last year. It had lost Rs 220 in last two sessions.
The difference in prices between the Chinese prices and world prices, it is considered good much in demand.
China has been a highly supportive factor for pricing recently, amid withdrawal of stimulus in the U.S. and with weak demand for No. 2 buyer India.
While, the economic data have shown that U.S. orders for durable manufactured goods rose unexpectedly in April and consumer trust was encouraged in May, supporting expectations of a upturn in economic growth.
Gold Trust Holdings, rose 8.39 tonnes to 785.28 tonnes on Tuesday – the biggest daily inflow in at least 14 months.
Traders said the inflow likely reflected the funds’ holdings before the sharp price drop on Tuesday, and the trend remains down remained.
Among other precious metals, platinum also served much of the losses in the previous session after the new Minister of Mines of South Africa committed itself to mediate crippling mining strikes now in its fifth month.