Gold prices started off the week trading higher based on Monday’s news that Federal Reserve Chairman Ben Bernanke believes the United States' economy has to grow more quickly to reduce the unemployment rate. Overall, spot market gold prices have appreciated slightly by about 0.7 percent this week.
News from India, China, and Mali worked against the gold markets last week.
Gold prices contracted slightly this week , to the lowest price since January, primarily due to reports of weaker manufacturing data from China and Germany. The HSBC Flash Purchasing Managers' Index indicated that China’s manufacturing has contracted for a fifth consecutive month.
Based on analysts' forecasts many investors were expecting 2012 to be another strong year for gold. But looking at the market recently may cause some investors to wonder if the professionals got it right.
Gold prices weakened earlier this week as a result of China reducing growth estimates to an eight-year low of 7.5 percent. On a relative basis, the current price of gold represents a 1.2 percent total decline from last week.
Goldman Sachs is bullish on the yellow metal and recommends long positions with conditions in the US appearing to play a major factor.
Gold prices have surged with the aid of inflationary risks on price of crude oil trading above $120 per barrel and the strengthening euro.
Gold prices have contracted over the past week under pressure from the drop in the euro, with European officials delaying a decision on the potential bailout package for Greece.
The Bank of England preserving its official Bank Rate paid on reserves at 0.5 percent helped the spot market price of gold to climb to $1747.50 per troy ounce. Gold prices were further supported by the Bank's vote to inject another 50 billion pounds into its financial system along with news of Greek leaders finally negotiating a deal on fiscal reforms.
IBTimes reported that gold prices rallied as the euro rose on a draft Greek bailout deal.
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