Gold was within $1,300 per ounce since January but has stayed close to roughly $1,200 or less for one month. Volatility in prices has gone down to extremely low levels as against the last decade. There were net outflows of dollars released by investors from gold-supported exchange-traded funds during the last two months, a statement from Barclays revealed.
There are two possible reasons for the unsteadiness of the yellow metal. One is long-feared inflation which did not come about and economic indicators in the US gaining strength. The prospects of interest rate hike are bearish for this commodity which brings in negative yield.
The second is gold’s long-established status may just have been flawed in recent years. Gold is supposed to safeguard investors from intemperance of markets as well as governments.
Unfortunately, it succumbed to the intense hype several years back hitting the highest point at an unparalleled high of roughly $1,900 per ounce. It stumbled and now many traders are thinking that gold will not always be a safe haven.
However, the precious metal firmed up this week as likelihood of a debt default by Athens hit
world market shares and counterbalanced guardedness among investors over the metal’s long-term position.
At the outset, gold recovered and reached a near one-week high at $1,186.91 but gave up some of the early gains initially. Spot gold increased 0.4 percent at $1,178.90 per ounce and closed the second quarter behind 0.3 percent which is the fourth consecutive weak quarter.
Gold futures for August remained at 0.5 percent ($1,179 per ounce).
Broad interest of gold investors turned out fairly positive, according to Barclays Capital.