Gold futures for August delivery gained 1.3%, reaching highest level since May 22 and traded at $1 410,40 a troy ounce as stocks and the greenback retreated. Spot gold traded at $1 411, 27 an ounce, up 1,3%. The dollar lost positions versus the Japanese yen and euro yesterday, thus shooting gold prices up. Nevertheless, prices are still down 4.6% for the month amid shifting expectations about а sooner-than-expected slowdown of the Quantitative Easing program. May 22 Ben Bernanke, Fed chairman, said the U.S. may scale back its monetary easing measures in the next few meetings, if the labor market improves further. He said the Quantitative Easing program is currently providing “significant benefits”. Meanwhile at the release of the Fed minutes the same day it came to notice that some policy makers think the stimulus measures should be scaled down in June. Strengthening of the dollar tends to decrease the prices of the dollar-priced commodities as it makes the greenback more attractive for investors. Also a more expensive dollar makes commodity prices costlier for foreign currency holders. Commodity traders have been tracking and positioning this year mainly according news of the stimulus program.
Gold was supported central banks increased physical demand. Russia and Kazakhstan have been diversifying assets by buying gold after its prices contracted with a record pace. The two countries have kept buying gold for a seventh straight month. Turkey is also on the list of countries, which have expanded their gold reserves. Turkey’s holdings increased by 18,2 tons to 427,1 tons in April, a tenth straight month rise. Belarus’s holdings increased for a seventh month and Azerbaijan’s and Greece’s reserved gained for a fourth month in a row. Gold demand in India, world’s largest buyer, will hit a quarterly record according to the World Gold Council and will reach 300 to 400 metric tons, equal to half of the total shipments last year. This increased interest, based on lowered prices, has kept supporting the precious metal.
“We see a bit of safe-haven trade coming in,” said Yang Shandan, a senior trader at Cinda Futures Co. “Physical buyers have helped to limit declines but they have also become more price-sensitive and tend to stay on the sidelines near $1,400.”
Elsewhere on the commodity markets, cash silver gained 0,5% and traded at $22.95 an ounce. Platinum traded at $ 1460,05, up 0,5%. Palladium also rose 0,4%. Platinum based ETPs increased by 35% and assets in palladium products surged 15% this year.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
