While Asian consumers have been an important force in the gold market, helping to offset the blow from heavy bullion-backed exchange traded fund (ETF) selling this year, they may not rescue the precious metal from its steep drop this time around, say analysts.
Gold prices fell over 2 percent on Thursday, breaking through the key psychological level of $1,200 an ounce as speculation about the Federal Reserve scaling back stimulus further heightened deflation fears. Spot gold was last quoted up 0.3 percent at $1,193 in the Asian trading session.
"We have seen gold prices being supported at current levels previously, and normally we would have thought that would be the continuing story with emerging market demand lapping up the excess supply. But what is throwing a spanner in the works is India," Mike Harrowell, senior resources research analyst at BBY told CNBC on Friday.
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