2014.11.1822:57:26UTC+00Gold hovers below $1,200 mark behind weakened demand over two week rally

Gold traded just under $1,200 on outlook that its recent rally to a two week high may bring demand amidst the strengthening of the dollar.

Spot gold traded at a price per ounce of $1,193.24 mid morning Singapore time, slightly down from yesterday’s $1,197.08, based on generic pricing from Bloomberg. The precious metal reached its highest since October 30th yesterday when it hit $1,204.68 after Russia announced that it increased its gold reserves while the benchmark spot contract on the Shanghai Gold Exchange rose to its highest level since April 2013.

The Bloomberg Dollar Spot Index went up to nearly its highest level in over five years today right before the minutes of the Federal Reserve’s meeting last October 29 is expected to be released. Gold is on track to post its second consecutive losing year with the central bank nearing its schedule for hiking up interest rates with other economies still on growth boosting policy.

Macroeconomic strategist Sun Yonggang from Shanghai’s Everbright Futures Co. says that, “Central banks outside the U.S. continue to maintain loose monetary policies, a key driver of the dollar which in turn provides direction for gold.” Sun added that an improvement in physical buying alone won’t be enough to pull it back from its current downtrend.

Futures for gold with a delivery date in December declined by 0.4% to a price per ounce of $1,192.70 in New York’s Comex a day after rising to its highest level in two weeks at $1,204.10. Assets under the SPDR Gold Trust, the biggest exchange traded product backed by gold, were unchanged after increasing for the first time in two weeks on November 7th.

Spot silver dropped by 0.3% to $16.1561 per ounce after advancing by 0.3% yesterday. Platinum for immediate delivery fell by 0.4% to $1,201 per ounce, while palladium crept down to $773.50 from $774.