Prompting the yellowish metal higher was underwhelming economic data released by the U.S. late last week and preoccupations about uprisings and demonstrations in the Middle East. The precious metal was pushing toward entry into a bull market as its gains since the end of June amount to roughly 19 percent, just short of the necessary 20 percent gain.
Investors and analysts are closely eyeing the U.S. Federal Reserve for any indication as to whether the body will taper economy-spurring monetary stimulus measures, which could happen as soon as next month. Incidentally, the strongest month for the precious metal's performance happens to be September. During early September 2011, gold touched its all-time high of $1,923.70 per troy ounce.
"When you look at gold, it only has to travel back through $1,416 to re-enter the bull market. So we're pretty close to that and [the metal's advance] has been the result of physical demand, geopolitical issues and also in the U.S. and what's happening with tapering," founder Jonathan Barratt with commodities newsletter Barratt Bulletin told the news source on Monday.
At 9:51 a.m. on Monday, gold futures edged down 0.04 percent, a 55-cent loss to $1,397.18 per troy ounce.
Weak U.S. data late last week spurs climb
The precious metal is coming off a strong Friday performance, when it surged at least 1.5 percent. The driver late last week was homes sales in the U.S. slipping more than forecast, which spurred concerns about the state of the globe's largest economy.
That significant drop in residence sales also prompted some industry observers to wonder whether the Fed will move forward with a reduction of the quantitative easing program.
"Further weakness in the U.S. housing market triggered some downplay over the possibility of a QE tapering, with gold rising past its $1,400 this morning," states a Monday note authored by analysts with OCBC bank, according to CNBC. "In fact, the positivity has been observed since last week, with net-long positions gaining."
Reuters reports the yellowish metal was nearing its top level in about 11 weeks during the morning hours of the Monday trade session.
When the precious metal drove to the value of $1,406 per troy ounce on Monday, it touched its highest level since early June. Another factor driving the price higher is ongoing strife in Syria, where United Nations inspectors are probing a region of capital city Damascus to determine whether president Bashar Al-Assad deployed chemical weaponry on Syrian nationals.
"We are generally coming out of the summer doldrums and people are looking for gold trade ideas," one Hong Kong-based precious metals trader told Reuters on Monday. "We are in the aftermath of a highly distressed slowdown so people still see some value in it, at least as a trade if not a longer term investment."
But once bullion surpassed the psychological threshold of $1,400 per troy ounce, MarketWatch reports the prices was rather uneasy.
However, indications abound that investors' interests are slowly gravitating back toward investment in the yellowish metal.
The Commodity Futures Trading Commission released data noting that money managers' confidence increased early last week that gold prices would begin heading north. Short coverings as well as the creation of long positions were the causes of the increased confidence, according to Barclays analysts.
"Given that we continue to expect tapering to be announced in September and that we expect the dollar to strengthen, ETP holdings are likely to remain fragile but flows will remain a key area to track," states a Monday client note authored by analysts with Barclays, according to MarketWatch.
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