Physical buying in India is also set to remain steady as citizens look to buy gold ahead of the wedding season. Exports of gold jewellery from the country fell by 30% to $443.19 million, in December from the previous year.
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.
U.S. dollar gold prices ticked higher to $1,597 per ounce Wednesday morning, holding gains from a day earlier, as the Dollar fell against the Euro despite warnings from a prominent Eurozone policymaker that the crisis in the region is not over.
After trading sideways for several sessions, gold bullion jumped above $1,590 an ounce for the first time this month Tuesday morning in London, in what analysts called a "technical" move after gold broke through a key level following remarks from Bundesbank President Jens Weidmann.
The world finds itself immersed in the depths of an economic crisis. This crisis however, is unlike any other experienced in recent history. What is at stake is the very foundation of our monetary system, the currency.
The Gold Investor Index, which tracks buying and selling on the world's largest physical gold market for private investors online, fell to 54.9 in January, down from a 12-month high of 58.3 a month earlier and its lowest reading since September.
Gold edged down on a Monday as speculators took their profits as prices rallied on thin volumes on Friday to their highest in a month on technical buying. A strong fall in the greenback triggered rapid gains in commodities and options-related buying on Friday.
Spot market gold bullion prices hovered close to $1,725 an ounce during this morning's London trading, holding gains made overnight in Asia, as stocks and commodities also recovered some ground lost last week.
Following questions asked in Parliament earlier this year regarding the 3,396 tonnes of gold bullion, federal auditors have now instructed the Bundesbank to regularly inspect the gold bullion reserves held in the US Federal Reserve, Bank of England and Banque de France.