Monday Open: $1,426.30
Weekly High: $1,482.40
Weekly Low: $1,412.70
Friday Close: $1,457.30
After last week’s drastic losses, gold has been making a strong recovery this week because of one primary reason: people are taking advantage of gold’s low prices and stocking up on physical bars and coins, especially in Asia and India. The physical demand for gold has offset some of the major losses incurred last week by stop-losses, U.S. economic recovery and the mass exodus of the market.
Monday opened the week with little movement. Tuesday saw a demand for physical demand start to grow very strong in India, as the low price of gold is coinciding with the anticipation of the Indian wedding season and the gold-buying Akshaya Tritiya festival in the middle of May. India is the world’s largest consumer of gold, so people are swooping in now while prices are low, thereby increasing demand and interest in gold. This demand helped rebalance the bearishness of gold’s position and counter the general skepticism in the gold market.
Some analysts believe that last week’s price fall was the bottom of the gold market, with gold prices set to return to higher trading levels on a cyclical rebound. A few global factors mildly influenced the price of gold this week, including the sharp drop of the yen against the dollar and the Japanese stock market, a new low for U.S. Treasury bonds and a record low of German bonds. These economic factors increased interest in gold as a hedge fund, and Wednesday and Thursday’s rise in the price of gold reflected this return.
A report from the International Monetary Fund also reported this week that Russia, Turkey and some Asian nations had increased their country’s stores of gold during the first quarter of the year, not taking into account April’s drop. Thursday also reported Spain’s higher-than-expected unemployment rate and the slight slippage of the U.S. dollar, contributing to renewed interest in the yellow metal.
So far, gold is experiencing a strong rebound, supported by a high demand for physical gold across the world. Small coins and bars are very popular right now, with American Gold Eagle coins leading the pack.