India, the globe's largest consumer of the yellowish metal, dropped 56 percent during the second quarter of this year, the World Gold Council said. More tepid demand for the yellowish metal has been in place in India since the middle of last month, according to a report penned by Standard Bank and cited by Bloomberg.
The report also noted demand for gold was at its weakest in more than one year.
"While the market has been going up on the stimulus fever, lack of support from physical demand is putting some pressure on prices," commodity strategist Marc Ground with Standard Bank in Johannesburg told the news source.
At 1:34 p.m. on Tuesday, gold futures fell 0.41 percent, a $7.40 loss to $1,775.90 per troy ounce.
Q3's sharp gains
Bullion achieved increases in value of 11 percent from the beginning of July through the end of September, Bloomberg reports.
Those increases represent the biggest advance since the second quarter of 2010.
The primary driver of the yellowish metal's advance during the third quarter of this year was Chairman Ben Bernanke with the U.S. Federal Reserve announcing the institution would implement a third round of monetary easing.
The precious metal also suffered losses as Spain inched closer to requesting bailout aid.
Madrid solicitation imminent?
Debt-hobbled Spain has been the subject of significant speculation about when it will request international bailout aid, according to MarketWatch.
The news service cited a report stating Spain might request bailout aid as soon as this weekend, but Prime Minister Mariano Rajoy said the nation he leads is not on the brink of requesting aid.
As the sovereign debt crisis nears a third year of ravaging banks, markets and public finance systems in the euro zone, Spain would follow Greece, Portugal and Ireland, all of which already have requested bailout aid.
The euro has been pressured by the sovereign debt crisis, and the precious metal tends to track the euro's performance.
Chicago Fed President Evans' commentary
Gold futures drove to their top value on Monday since February after President Charles Evans with the Federal Reserve Bank of Chicago issued remarks perceived as dovish, MarketWatch reports.
During an interview with CNBC, Evans said the third round of asset purchasing is forecast to run for another 12 months minimum in order to be effective.
"I frankly think it is going to take almost a year to see the type of improvements in labor markets that I am expecting, just getting through the first half of next year with the headwinds that we're facing, I think that it's probably later in 2013 that we would get there, so in my opinion, we'd continue with those asset purchases until we see payroll employment more like 200-250,000," Evans told the news source.
Flooding the market with dollars when purchasing debt tends to draw down the currency's value, which in turn pushes up the precious metal's value.
U.S. jobs report awaited
Expectations are high for the U.S. Department of Labor's jobs report for September, which is set for release later this week, according to Reuters.
Creating jobs and tackling the nation's unemployment rate is the top priority of the third round of quantitative easing.
"We do have this conditional QE and it is conditional on employment growth, and the employment growth release therefore must be more important than ever. So we are waiting for that," analyst Matthew Turner with Mitsubishi told the news source.
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