2014.07.2303:45:43UTC+00Lowered demand makes gold falter below three month high

Lowered demand makes gold falter below three month high

An appreciating dollar and a rallying equity market is retaking attention and making gold fall below its highest value in three months.

Spot prices for the precious metal were trading at $1,306.96 per ounce mid morning Singapore time after losing 0.5% to close at $1,306.42 yesterday, Bloomberg data says. It reached its highest since March 19 of $1,345.17 on July 10th before it saw its seven week run end last week. Gold with a delivery date in December had a price per ounce of $1,307.90 in the New York market to mark a decline from yesterday’s $1,308. Meanwhile, holdings in the largest gold backed exchange traded product, the SPDR Gold Trust, increased by 0.2%.

Gold’s drop yesterday came on the heels of separate reports that showed home sales in the US going up to its highest in eight months and a slowdown happening in the increase in the country’s cost of living in June. The reports strengthened the dollar to post its highest value against the euro in eight months and spurred stocks in Asian markets to climb for a third straight day.

HSBC Securities analyst James Steel says that “Gold was put on the defensive after the release of mixed US economic data… and is up against a stronger USD and a powerful stock market rally. This is likely to keep the pressure on prices.”

Prices of gold have recovered by 8.8% so far this year on the back of unrest in several parts of the world including Ukraine and the Middle East. It lost 28% in 2013 when its bull run ended after twelve years behind hints from the Federal Reserve that they will begin drawing back its economic stimulus.

Spot silver increased to $20.9513 per ounce today to improve on yesterday’s $20.9486, while platinum was mostly unchanged at $1.487.88 per ounce.