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Gold price drops by $27 per ounce

KUWAIT CITY, May 11, (KUNA): The price of gold ended the week on a drop of $27 per ounce to settle at $1,288 per ounce, as indicated in a specialized report here, Sunday. The Sabaek Company report attributed the drop to US economic data which suggest an end to quantitative stimulus measures soon and a return to normal supply and demand dynamics. The company said this turn in policy prompted a shift of liquidity from gold hedging into stocks markets with a return of investor appetite for risk. The report forecasts continued low prices over the next few days with the ounce approaching the $1,270. Whether gold would go up depends on the political situation in Europe in connection to the Ukraine situation. If tension persists on that front, it is most likely price would go up.

However, any hike in price would be modest, as central banks still refrain from buying the yellow metal and investment funds bring down their gold and silver stash as they opt for stocks and monetary market products. The price of silver meanwhile dropped to $19.1 per ounce by the end of the week, shedding 60 cents and continuing on an un-expected downward slope. Despite conditions which lead to predictions of increased industrial demand for the metal, electronic speculations are weighing prices down.

Though there is a forecast of hike price soon, analysts are not in agreement as to how soon, with some suggesting late May and others suggesting sometime towards the end of Q2, 2014. The specialist report indicated that other precious metals also lost ground by end of week. The local gold market saw hike in demand due to the drop in price, as the yellow metal sold for KD 11.72 per gram. Items in 21 and 18 carat gold were particularly popular, it said, as the pure metal came to KD 11,700 per kilo. (KUNA)

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