Gold Slides as Investors Move into Stocks
Source: miningmx (4/6/09)
"Tentative optimism about the economy in the after-glow of last week's G20 meeting bolstered share prices and lessened the allure of gold."
Spot gold was quoted at $878.75/879.85 an ounce at 1234 GMT from $892.50 late in New York on Friday.
Tentative optimism about the economy in the after-glow of last week's G20 meeting bolstered share prices and lessened the allure of gold. Global stocks as measured by MSCI's all-country index rose almost half a percent on the day.
"After the G20, people are willing to believe there's an opportunity for some green shoots of recovery and stock markets are looking buoyant as a result," said Simon Weeks, managing director of precious metals at ScotiaMocatta in London.
"You'd expect some unwinding of gold's safe haven status and a recovery in some of the other metals that had been under the cosh on the overall economic situation," he added.
Meanwhile, the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, said it recorded a small outflow on Friday from record levels.
The recent fall in prices has revived demand from another source, however, with Indian jewelry sales picking up ahead of the key gold-buying Akshaya Tritya festival later this month.
"The gold market is showing clear signs of improved near-term fundamentals: scrap supply is much slower since gold fell below $930/oz," UBS said in a note.
"Patchy jewelry demand was seen late last week when gold was near the week's lows; and this morning our traders report Indian clients calling to buy gold. . .because it is now cheap."