Gold hits its lowest

LONDON. – Gold hit its lowest in a month yesterday, as the dollar firmed ahead of new US economic data and speeches by Federal Reserve officials that may signal more interest rate increases than anticipated. All eyes will be on Fed Chair Janet Yellen who speaks on the US economy and monetary policy today, with investors looking for further clues on the number and timing of rate hikes this year.

Spot gold was down 0,1 percent at $1,214.86 an ounce by 0903 GMT, after touching a session low of $1,208.15, its cheapest since February 23. The metal lost 3 percent last week, its biggest weekly loss since November on speculation that the next US rate increase could come as soon as next month.

Liquidity was thin as London and many other gold markets were closed for the Easter Monday holiday.

“Gold’s short-term technical trend has slightly deteriorated, with the $1,190-$1,200 level becoming a strong support area,” said Carlo Alberto de Casa, ActivTrades chief analyst.

Hawkish comments from several U.S. Federal Reserve officials last week put investors on guard for the possibility of at least two rates increases this year, triggering a widespread correction across commodities and bolstering the dollar, in which they are denominated.

“While we have stated that Fed tightening may not be as negative for gold as in previous tightening cycles, an April rate rise would likely knock gold lower near term,” HSBC said in a note.

Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, rose to its highest since December 2013 at 26,48 million ounces on Thursday, the latest available data shows. – Reuters.

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  • Michael

    “Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, rose to its highest since December 2013 at 26,48 million ounces on Thursday, the latest available data shows. – Reuters.”

    How reliable are GLD’s holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I’ve stumbled upon, verified and welcome everyone else to verify for themselves:

    “Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.

    I remember there was a highly publicized visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”