The gold price steadied today (Thursday) after suffering small losses this week on the back of a rebound in the value of the dollar.
Falls in the value of the US currency at the start of the week had helped gold reach a price of £890.86 per troy ounce on Monday – its highest value in 15 months – but some better economic reports from the US saw the dollar pick up value. As a result, gold fell back and then steadied. The precious metal was valued at £882.79 per troy ounce at 07:45 this morning (5 May).
One Australian precious metals trader told Reuters: "I think the [gold] market got a little carried away on the long side. At the moment, we are just seeing some profit-taking.”
But he said the trend for higher gold prices is “still in place”. The value of gold has soared by 21 per cent since the start of the year as investors recognised its strength as a safe haven for their money.
The rally in gold has been largely due to expectations that the US Federal Reserve is now less likely to increase the cost of borrowing because of economic uncertainties. Analysts’ predictions of a US interest rate rise were further weakened on Wednesday when figures showed weaker than expected growth in the US private employment market.
Strong sales of gold coins reported in April
The new 2016 Mercury Dime Centennial coin produced by the US Mint almost sold out within a week of its launch, with 122,510 from the total mintage of 125,000 snapped up by collectors and investors.
The 24 carat gold coin weighs one-tenth of a troy ounce and buyers are limited to 10 per household.
The sparkling performance comes as the US Mint reported good gold coin sales figures for April. The latest edition of the one troy ounce American Buffalo Coin sold 19,500 units, 500 more than in February and well ahead of the 7,000 that were shifted during March.
And there were 93,500 sales of American Gold Eagles. The coin comes in one troy ounce, half, quarter and one-tenth of an ounce weights, with the one ounce coin the most popular among investors. A total of 279,000 of the one troy coin variation were sold between the start of the year and the end of April.
India gold recycling schemes bring in 80 tonnes
India’s efforts to persuade more people to recycle gold and thus reduce the country’s reliance on imports are paying off.
Some 80.2 tonnes of the precious metal were delivered for recycling from homes and temples last year, according to the World Gold Council.
However India – the world’s second biggest gold importer after China – still bought in a massive 849 tonnes last year, compared to the 828 tonnes imported in 2014. The country experienced especially high demand towards the end of the year, when 233 tonnes were imported during the final quarter of 2015.
Some of the gold being deposited with banks in the government’s approved monetisation scheme is being melted down to create gold coins for collectors and investors.
