An abatement in the wave of speculative selling pressure is allowing strong demand for physical gold from Asian buyers to assert its influence over the price and there is a growing case to be positive over the prospects of the yellow metal.
Spot gold fell to three-week lows below $1,370 an ounce Tuesday, as stocks and commodities also fell amid ongoing speculation over when the U.S. Federal Reserve might begin reducing the size of its quantitative easing program.
The gold price continued to hold above $1,600 per ounce in Asian and early London trade on Tuesday, as world stock markets struggled again amid fresh uncertainty and rumor over Euro-member Cyprus' banking crisis.
The spot gold price dropped below $1,600 an ounce for the first time in six months Wednesday, as the dollar strengthened and stock markets were broadly flat, ahead of the publication of the latest Federal Reserve policy meeting minutes later today.
Wholesale gold bullion prices hovered just below $1,670 an ounce Monday morning in London, having regained some ground after Friday's losses, while stocks and commodities also ended the morning up on the day.