Gold futures climb as demand poised to grow

Confidence about increased demand helped push up gold futures on Monday, according to Bloomberg.

After having scraped its 34-month trough last week and enduring its largest quarterly losses ever, the yellowish metal achieved a second consecutive trading sessions of gains as the third quarter of the year kicked off.

The yellowish metal lost 23 percent of its value during the April-to-June period in the aftermath of Chairman Ben Bernanke with the U.S. Federal Reserve stating that the body intends to reduce the pace of its economy-spurring measures.

"The market is focusing on the U.S. Fed's monetary policy," states a Monday report authored by analyst David Davis with SBG Securities in Johannesburg, according to Bloomberg. "In the longer term, we are likely to see a marginal upward trend in the price coming off a lower base, supported by physical demand and sentiment surrounding the likelihood of a reduction in global production brought about by low prices."

At 10:59 a.m. on Monday, gold futures rose 0.91 percent, an $11.19 lift to $1,245.72 per troy ounce.

Annual gains streak in peril
Thus far this year the precious metal has lost 26 percent of its value as its streak of annual gains is poised to halt at 12 years.

Whether gold rebounds is unclear but the Macquarie Group Ltd. stated in a Monday report that tapering stimulus measures could end up consuming more time than thought.

One analyst projected the price of gold being low will prompt increased demand from regions in Asia.

"I don't think it's sustainable at that level. Lower prices will induce strong demand in Asia," analyst Mark Pervan with Australia & New Zealand Banking Group Ltd. told Bloomberg on Monday, pointing to the strength of the economic recovery in the U.S. and the reduced pace of economic growth in China.

The record price of gold is $1,923.70 per troy ounce as established in early September 2011. When the precious metal did notch that all-time high, it was nearly twice as much as its value in 2008.

Indian demand forecast to grow
In India, the globe's biggest consumer of the yellowish metal, increased appetite is poised to aid demand, according to Reuters.

Bargain hunting and short covering are sure to ensue, director Gnanasekar Thiagarajan with Commtrendz Research told Reuters on Monday.

Chinese consumption to climb
China, the globe's largest generator of gold, trails only India for consumption of the yellowish metal, according to The Wall Street Journal.

Executives in the Asian nation and professionals have been saying that prices of the yellowish metal do not have the strongest of impacts on other markets.

At a recent meeting in Shanghai for financial policy makers, chairman of the board Yang Maijun with the Shanghai Futures Exchange pointed to two nations that help control prices.

"The U.S. and Europe still have the pricing power, although prices are usually being affected by a number of factors, such as liquidity and overall economic conditions," Maijun told the audience at the Lujiazui Forum.

Beginning on Friday, the Shanghai Futures Exchange is set to begin operating night trading hours for gold and silver contracts.

He said that the effort aims to aid the exchange widen its scope on the global market.

"The purpose of night trading is to help prices [on the Shanghai exchange] better connect with global prices, and to help achieve our goal of internationalizing our contracts," the chairman of the board told the forum, according to The Wall Street Journal.

Various forces to impact Saudi demand
The Saudi Gazette reports demand for gold in the Middle Eastern nation will be impacted by various factors.

The National Commercial Bank noted in its Saudi Gold Mining Sector report that those factors are local socio-political dynamics, movements of global prices and relations between traders and buyers.