2014.10.2100:56:02UTC+00Gold hovers near highest in five weeks behind global outlook

Gold hovered near its highest in five weeks with investors weighing the global economy against the outlook for changes in monetary policy around the world.

Spot gold traded at a price per ounce of $1,246.19 mid morning Singapore time today, slightly down from yesterday’s $1,246.91 after it gained by 0.7%, based on generic pricing from Bloomberg. The precious metal advanced to its highest since September 11th of $1,249.75 on October 15th when equity markets around the world started falling.

Gold recorded its first back to back gaining weeks last week since July after the dollar declined from its highest level in four years due to speculation that slowing global economic growth could end up delaying the Federal Reserve’s schedule on when to raise borrowing costs. The US central bank’s policy committee members are seen to move towards ending its bonds buying program next week as it exits its quantitative easing phase.

Holdings under the SPDR Gold Trust, the world’s biggest bullion backed exchange traded product, which increased last week for the first time in five weeks, fell by 1.2% to the lowest since November 2008.

Analyst Zhu Runyu from CITICS Futures Co. says that, “While the market isn’t sure when the Fed will raise rates, we still expect QE to end at the October meeting as economic data continues to show improvement. At the same time, Europe has embarked on loosening monetary policy. This will weaken the euro against the dollar, extending gold’s longer-term downtrend.”

Futures for gold with a delivery date in December was up today at $1,246.30 per ounce from yesterday’s $1,244.70 in New York’s Comex.

Spot silver declined by 0.1% to a price per ounce of $17.42 after climbing by 1% yesterday. Platinum for immediate delivery dropped by 0.2% to $1,265.8 per ounce, while palladium retreated by 0.3% to end its two day rally at $761 per ounce.