Gold Market Update – October 2013

The average price of gold eased by around 2½% in October, though the daily spot price generally strengthened over the second half of the month and is currently trading at around $1,340 per ounce. Gold is set to record its first annual price decline since 2000.

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  • The average price of gold eased by around 2½% in October, though the daily spot price generally strengthened over the second half of the month and is currently trading at around $1,340 per ounce.
  • Gold is set to record its first annual price decline since 2000, with demand for the shiny metal dwindling on reduced fears of a bad event and the outlook for still soft inflation.
  • The price of gold has been supported by softer US data over recent weeks, which have lengthened the chances of later Fed stimulus withdrawal. This pattern is likely to continue until markets have more certainty around the timing of and the size of the withdrawals. Another source of uncertainty has been the recent US shutdown and the US debt ceiling debate, which has provided further support to safe-haven gold.
  • Researchers at the CSIRO believe they have discovered a way to make gold exploration much quicker and cheaper, after finding veins of gold in the leaves of eucalyptus trees. It is believed that leaves with gold may indicate the presence of gold deposits up to 35 metres beneath the surface.
  • While Indian demand is typically strong in the first week of November during the Indian Diwali festival – the biggest gold buying period of the year – the high price of Indian gold is likely to keep demand relatively soft this year.

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