Gold futures have continued to rebound from last week’s historic sell-off, locking in a 1.8 per cent rise as futures investors and buyers of gold coins and bars continued to step into the market.
The most actively traded contract, for June delivery, on Monday rose $US25.60, or 1.8 per cent, to settle at $US1,421.20 a troy ounce on the Comex division of the New York Mercantile Exchange.
On April 15, gold prices fell nine per cent, posting their largest one-day slide since the early 1980s.
The slump, which followed steep losses the previous session, was triggered in part by concerns Cyprus may sell some of its gold reserves to fund its bailout.
Traders said the selling was exacerbated by weak Chinese growth data and technical selling as sentiment toward the metal soured after more than a year of flat to lower prices.
Barclays on Monday became the latest bank to cut its gold-price forecast in response to the plunge, citing the recent fall in prices and the chance that investors in gold exchange-traded funds will continue to dump the metal.
The amount of gold held by such funds is down 277 metric tons so far this year, Barclays says, nearly matching the 279 tons bought by ETFs during the whole of 2012.
Barclays forecasts average gold prices of $US1,483 an ounce this year, in line with other bank estimates and down 10 per cent from its prior expectations of $US1,647 an ounce.
Gold futures have rebounded by 4.4 per cent since last week’s low, gaining in four of five days as investors in gold futures and coins and bars saw a bargain in the metal’s retreat to two-year lows.
“The slaughter last week got way ahead of itself,” Bob Haberkorn, a senior commodities broker with RJO Futures, said of gold’s decline.
“You’ve had stories out of Asia and the US on strong demand for physical gold. Last week we started to see more [futures and options] activity coming in, people looking to get back in or establish new positions.”
US Mint gold coin sales, viewed as a proxy for retail investors’ appetite for the metal, stand at 167,500 ounces so far this month, data on the agency’s website show, from 20,000 ounces during the same month of 2012.
“It’s been crazy,” Michael Haynes, chief executive of Apmex, an Oklahoma City-based coin dealer, said of the uptick in coin demand.
“The physical metal has been on fire. It’s gold on sale.”
Haynes said that demand had cooled off from the initial frenzy following gold’s declines, but that Apmex’s daily sales volume remained at least double what the firm had expected entering April.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,424.50; previous PM $1,405.50
Jun gold $1,421.20, up $25.60; Range $1,403.50-$1,438.80
May silver $23.324, up 36.4 cents; Range $23.070-$23.650
Jul platinum $1,436.80, up $12.90; Range $1,424.60-$1,445.50
Jun palladium $681.90, up $4.85; Range $674.70-$685.40
