Gold prices decreased by 0.9 percent to about $1,234.80 per ounce.
The demand for gold is split between physical demand, mostly for jewelry or a few industrial processes, and hedging or diversification demand, where investors hold gold in the hopes that it will retain its value where other investments like bonds, equities and conventional currencies do not. Gold is also perceived as a hedge against inflation.
“The physical market is unlikely to provide much support for gold over the summer months, typically the seasonally weakest for jewelry demand,” said the Royal Bank of Scotland in an interview with Bloomberg.
Elsewhere, silver futures also fell by about one percent. Goldcore Dublin Ltd., a bullion dealer, said that it might be undervalued compared to gold. Silver futures are up around 8.5 percent from the beginning of the year, as compared to 12.5 percent for gold futures. It remains unclear whether the retreating price of these precious metals is due to profit-taking by traders, a perception that stock markets are recovering, or other factors.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.