Bullion touched its top value since the middle of last month during the morning of the Tuesday trade session but started slipping as the day continued. Should gold futures notch gains, the precious metal would mark its longest bullish trend in about three months.
Increased demand for gold futures is mounting in China, which likely pushed past India as the world's largest consumer of gold.
"Physical demand is very price-sensitive, especially at the retail level," analyst Lv Jie with Cinda Futures Co. told the news source on Tuesday. "While that has helped gold hold up so far this year, we may see some of that demand drop off as prices climb."
At 9:59 a.m. on Tuesday, gold futures edged down 0.08 percent, a $1 loss to $1,252.31 per troy ounce. Silver futures moderately gained 0.05 percent, a penny lift to $20.41 per troy ounce.
The Wall Street Journal reports gold – despite losing its luster for the first time in 12 years in 2013 – is drawing some investors' interest.
For the first time since 2000, the yellowish metal did not achieve gains last year. That was partially attributed to the U.S. economy and the world's reserve currency gaining strength. The greenback and the precious metal typically perform the inverse of one-another.
With losses that amounted to 28 percent last year, gold is attracting interest in part because of its low price. Some investors are confident about the precious metal reversing course and pushing higher in 2014.
The yellowish metal will still "provide good insurance against crisis, higher taxes and inflation risks," director John Brynjolfsson with hedge fund Armored Wolf told the news source on Tuesday, noting his belief that bullion will be propelled higher this year by increased demand from China and unrest in the Middle East.
But others noted that a sense of discomfort with the yellowish metal remains in play.
After having established a record high price of $1,923.70 per troy ounce in September 2011, gold futures have lost more than 30 percent of their value.
"Even if guys are buying, most of them aren't talking about it – nobody wants to be seen holding it," former Lehman Brothers Holdings Trader Jared Dillian told the news source on Thursday. "That's how bad it's gotten."
December data benefits bullion
CNBC reports gold futures' gains early this week are linked with underwhelming economic data released by the U.S. late last week.
With expectations of job creation amounting to 200,000 last month, the data released by the U.S. Department of Labor noted 74,000 jobs were created in December. That indicated that the U.S. economy, recognized as the globe's largest, might not be as strong as believed.
The data cited in the jobs report was a "huge miss and will give pause to all of this talk about tapering," chief executive officer Scott Carter with Lear Capital told CNBC on Tuesday.
He said that data is likely to impact the decision of the U.S. Federal Reserve, which is scheduled to convene two days of policy meetings later this month. At those meetings, outgoing Chair Ben Bernanke is poised to step aside for the term of newly approved Chair Janet Yellen.
A key matter that Fed policy makers have before them is what to do about monthly asset purchases. In December, the body opted to slash monthly debt acquisitions by $10 billion.
But the jobs data from last month is likely to cause the body to re-think whether it wasn't to continuing with that strategy.
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