Monday opened the week with gold plunging below the key $1,200 mark as U.S. stock markets entered the week on a very robust note. Some mining and related stocks dipped along with gold. Notably, on Monday European Central Bank President Mario Draghi dropped the news that Greece would not be forced out of the Eurozone. This move towards resolution of the high-anxiety “Grexit” could also account for gold’s drop.
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However, the price of gold regained what it lost on Tuesday, edging back above $1,200, when the dollar took a dive. Gold also received support when the European Central Bank revealed it would require higher insurance in exchange for emergency funding for Greek banks. India was on gold’s radar this week, as the Akshaya Tritiya festival is believed to be an auspicious time to buy gold, and the country had been increasing supply leading up to the event.
Back down again on Wednesday, the price of gold dropped after strong U.S. housing data spurred speculation that the Federal Reserve would soon begin raising interest rates. Wednesday was a three-week low for gold, and the lowest spot gold delivery for April, at $1,187.90.
On Thursday, weaker-than-expected manufacturing data from Japan, China and the Eurozone translated to gains for gold. The dollar retreated, also bolstering bullion. The markets are busy watching the Federal Reserve and Greece, and end-of-week trading focused on anticipating next month’s events, which could be higher interest rates from the Fed or Greece failing to pay its debts.
On Friday, global equities hit significant highs, thereby lowering gold prices. Gold closed on a slight losing streak. Still, Newmont Mining Corp., the largest U.S. gold producer, expects the price of gold to increase by 25% by 2020, pointing to increasing demand in China and a weaker dollar as contributing factors.