In what seemed to be the worse year for gold and other precious metals, the financial markets saw an unexpected rally on the first trading day of this year.
In Singapore today, bullion for immediate delivery was trading at $1,224.09 per ounce at 12:03PM, which was a considerable increase from $1,205.65 on December 31. The last day of 2013 saw gold sinking to $1,182.27 per ounce, a six-month low. 2013 saw gold slumping at 28%, which was considered the biggest loss yearly since 1981, Bloomberg said in its report. Prices of silver were also noted to have jumped.
Since the first product of gold was introduced in 2003, last year was the end of the precious metal's 12-year bull run as bullion-backed exchange-traded products' asset had shrunk. Moreover, US data released on Dec. 31 indicated an increase in consumer sentiment and home prices, which highlighted the fact that confidence by the US Federal Reserve has returned that the agency stated it will be reducing its $85 billion monthly bond purchases this month due to the improving economy.
UBS AG Singapore-based wealth-management unit head of commodities research Dominic Schnider said, "The Fed is out, that's cleared, so with no incremental news flow on the monetary-policy front and shorts remaining elevated, we see some of that being squared and giving gold some temporary support. It's been technically difficult to break below $1,200, so it seems there is some genuine interest on the physical side."
Shanghai-based Gensha Metals Ltd trader Wallace Ng stated, "The market has been holding well above $1,200 and that's driven by physical demand. We saw very good physical demand from China in December, which is likely to continue as we head into the Lunar New Year." The Chinese' Lunar Year will start on January 31.
Silver for immediate delivery saw its price soared from $19.4717 on December 31 to $20.1429 an ounce. Silver last year sank 36%, also the biggest since 1981. Platinum, capping 11% annual decline, traded at $1,383.88 an ounce from $1,371 per ounce on December 31.
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