Spot gold remained range bound on a quiet day with the yellow metal touching $1663, before easing to trade around $1656.
It was quiet day all around as equity markets bounced back after suffering 4 straight days of losses. The Dow Jones Industrial rebound 100 points to 12,824. Investors were reacting to a bit of good news out of Europe, as Spanish and Italian bonds yields fell. It was much-needed positive news from Europe after a terrible day yesterday, in which yields for Spanish bond yields hit their highest level this year, and Spanish stocks tumbled to their lowest mark in three years. Alcoa also added to the gains after reporting positive earnings after the close yesterday.
It was a light day on the data front for the U.S. The release of import prices was no real surprise. Import prices month over month rose 1.3%, while year over year there was a drop to 3.4% from a previous 5%.
Thomson Reuters GFMS put out its gold survey for 2012 and expects gold to rebound to $2,000 by the end of this year or early in 2013, it also said in its report, although an apparent easing of the eurozone debt crisis, which seems to have lowered expectations for a third round of quantitative easing (QE3) in the US, will keep in under pressure in the short term. Physical demand is slowly returning to the market as India jewellers have reopened their shops after a 20 day strike.
“Shops are reopened but still final approval is pending from the government; however, demand will be back as it is the Akshaya Tritiya festival and the marriage season has started” an India-based trader said.
Spot silver bounced back to trade to an intra-day high of $31.85, as it followed the Dow higher. Strong earnings from Aluminum giant Alcoa lifted base metals from early lows. The gold silver ratio ticked higher taking out its March highs of 52.56, next stop now is the January lows set at 53.73.