Gold: an overview of the market situation

Gold prices rose today, recovering after fixing the largest quarterly loss in history, which was associated with stabilization of the dollar ahead of important U.S. data, which is expected to be able to provide more clues regarding the prospects of stimulus measures. Recall that last week, concerns about the decline in asset-purchase program by the Federal Reserve led to a drop in gold prices to the lowest level in three years.

According to the data, in II quarter of 2013, gold prices have fallen more than 23%, which was a record decline since 1970, when the market of precious metals only formed. Recall that the previous most significant quarterly decline in gold prices is dated the I quarter of 1982, when the decline in the price of gold by 18%. Silver for the II quarter of this year fell by 32%.

According to analysts and experts, the mass exit of investors from the market of precious metals associated with fears of the past to strengthen the U.S. economy, which automatically leads to an increase in bond yields and, consequently, of the U.S. dollar, which in turn will dramatically reduce the cost of precious metals such as gold and silver.

We also add that the gold reserves in exchange-traded funds dropped significantly since the beginning of this year. Recent data showed that stocks in the SPDR ETF Gold Trust fell nearly 13 million ounces this year. In addition, we add that hedge funds and money managers reduced their bets on the purchase of gold futures and options to the lowest level in six years.

In addition, we note that even lower prices in the last few weeks has not been able to rekindle physical demand in Asia, which has traditionally been the largest buyer of gold.

The cost of the August gold futures on COMEX today rose to 1244.40 dollars an ounce.