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Gold futures see sharp fall as demand down

Xinhua, May 4, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange plunged on Thursday as the precious metal suffered a sharp decline in demand.

The most active gold contract for June delivery fell 19.9 U.S. dollars, or 1.59 percent, to settle at 1,228.60 dollars per ounce.

The sharp fall was a response to a report released by the World Gold Council, saying that gold demand in the first quarter of 2017 was 1,034.5 tons, which was a 18 percent year-on-year decline.

Especially, gold purchases by central banks in the first quarter were 76.3 tons, a 27 percent drop compared with 104.1 tons in the same period of last year.

"This lower rate of purchases is likely to continue throughout 2017," said the World Gold Council report.

However, some analysts maintain that this year's investment demand for gold can still be considered as robust, because the figure of last year was extraordinary high.

The down-turn of gold futures was also a result of an announcement on Wednesday by the U.S. Federal Reserve, in which they expressed confidence in the American economy despite a weak GDP growth rate in the first quarter of 2017.

The advance estimate of U.S. first-quarter real GDP growth was only 0.7 percent, as released by the U.S. Bureau of Economic Analysis on April 28.

The Fed viewed the slowing in growth during the first quarter as likely to be transitory, so it will still pursue gradual adjustments in the stance of monetary policy. Enditem