There is a slight decline in the gold prices today in the Asian trading thanks to a thin holiday season trade wherein on the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD 1,203.20 a troy ounce. Thus, gold futures saw a decline of 0.02%, after hitting an overnight session low of USD1, 188.00 a troy ounce earlier.
Though indications from the U.S. economy on the GDP front are positive where the Commerce Department said that the U.S. economy expanded by 4.1% in the third quarter, the gold prices have declined consistently. The U.S. economy which was expected to grow at 3.6%, received higher growth rate. Historical evidence show that when gold prices are low, the U.S. economy does well.
According to market observers who have been watching the decline of fall in the gold prices, the precious metal is down approximately 29% this year. In fact, the yellow metal has seen remarkable fall which according to those who have been watching its prices for long say is a record fall in 32 years.
The U.S. which is mulling a plan to taper stimulus may further help gold, though, not many investors share the opinion for frankly few reasons; first, the world’s largest consumer India has imposed heavy duties to discourage gold consumption in the country. India which is facing huge CAD earlier this year levied taxes on gold imports.
Though the festival season should see heavy buying of the precious metal, according to market observers trading volumes are expected to remain light due to the Christmas holiday. They also observe that many traders already closed books before the end of the year which in return is expected to reduce liquidity in the market and increase the volatility.
Other precious metal, silver too was down. On the Comex, silver for March delivery was down 0.26% at 19.403 a troy ounce. The decline is continuing for silver too as it is down approximately 36% this year. Similarly, copper for March delivery was down by 0.01%. So far, the year 2013 has not been good for metals.
Earlier, physical demand for gold picked up in Asia as prices fell towards $1,200 last week; however, volumes traded on the Shanghai Gold Exchange today are lower than last week’s. This is happening as buyers waited to see if prices could drop further.
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