Gold slid on Tuesday towards a low not witnessed in four weeks.
Spot gold lost 0.2% to sell at $1,290.79 per ounce as of 1431 GMT. US gold futures scheduled for June delivery plunged by $2.20 per ounce to deal at $1,281.60.
Gold took further pressure from rise of S&P 500 that hit an intraday peak after economic data indicated acceleration of growth of US manufacturing sector for a second consecutive month in March.
“That was a very good reason for gold to come off. Gold has not been performing at all. The Indian and Chinese lack of physical demand is not helping the market. It feels like $1,250 here we come,” said Afshin Nabavi of Geneva-based MKS.
In its weakest trading since mid-February in Asia, the commodity declined to $1,278.34, as stocks took a boost from Yellen’s comments, which gave investors confidence that the Federal Reserve would continue backing the economy for a while.
According to Reuters, buyers have lately found themselves having difficulties deciding whether or not to buy gold when its price is low, particularly because the metal’s market outlook is uncertain at a time when the US monetary policy is being steered towards normalcy.
Analysts say that investors in gold are going to treat upticks as a reason to minimize exposure as the commodity continues to lose its safe haven appeal and physical buying is scaled back.
Although gold buying in Asia usually surges when the price is slow, this time around the market witnessed lackluster trading, dealers said.
However, Goldforecaster.com’s founder Julian Philips said all immediate factors causing decline of prices of gold have disappeared. According to Marketwatch, Mr. Philips added that he expected to see investor readjust positions, which is a driver for gains in silver and gold prices.
In Asia, India’s finance minister said he was consulting the country’s central bank over the possibility of easing restrictions on gold imports, which is likely to hike demand in the metal.
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