The price of gold dipped to a four-week low on Wednesday (23 March) following rises on Tuesday as investors sought a safe haven for their money after the Brussels terror attacks.
The price of the precious metal has been volatile so far this week, starting off on Monday at £864.48 per troy ounce at 09:00 and reaching a high of £883.37 at 13.45 on Tuesday following the atrocities in Belgium. This morning at 09:00, gold was £864.98 per troy ounce.
The strengthening US dollar on Wednesday, helped by remarks from US Federal Reserve members pointing to the possibility of further interest rate rises on the agenda were among the reasons that Tuesday’s rally didn’t last.
Analysts also said that profit takers helped to bring down the gold price ahead of the long Easter weekend.
"After the news of Brussels, markets had a strong rally, but with the long weekend approaching there is some liquidation, likely to continue for the next few hours," MKS SA head of trading Afshin Nabavi told Reuters on Wednesday.
However, the slump in what has been a remarkable performance by the precious metal so far this year is not predicted to continue.
Georgette Boele from ABN Amro said: "The Fed comments put a bit of pressure on the gold price but are unlikely to derail a more positive long-term sentiment towards the metal.
“If there was a massive rate hike and a jump in the dollar, it would be very difficult for gold to move higher, but any rate increase will be gradual."
Indian jewellers call off strike
Indian jewellers striking over a one per cent tax on the sale of gold jewellery have called off their action after 18 days.
The All India Gems and Jewellery Trade Federation ended the strike after an eight-hour meeting with government officials, in which they received assurances that small businesses would not suffer “harassment in the imposition of the excise duty”.
The tax was imposed in the February Budget as part of efforts to reduce the country’s reliance on imported gold. Figures from Indian customs show that there was a slowing in imports last month, when the country bought in 23.8 tonnes.
However, the end of the strike is likely to reverse that trend, with jewellers returning to work and increasing demand once again for the precious metal. This could, in turn, boost the gold price on the international markets.
Silver coin focus
The second release of the Royal Canadian Mint’s Wild Canada Silver Maple Leaf coins has sold out.
The mint produced 50,000 of the one troy ounce 99.99 per cent purity silver coins, which feature a roaring grizzly bear. They are part of the Wild Canada six coin collection, which is running for three years.
The first coin in the series depicted a roaring wolf and will be followed with a cougar, a moose, an antelope and wood bison. The series will be completed in 2018.
Demand for the grizzly bear edition has been so high from collectors that the coins are now changing hands for around £7 more than the spot silver price.
