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Gold Prices Are Steady around $1,180 per Ounce

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Gold prices are up marginally 

This series analyzes gold prices and market fundamentals. For an in-depth look at gold and related companies, sectors, and drivers, please refer to our Gold ETFs page.

June gold futures contracts increased marginally by 0.19% and closed at $1,188.80 per ounce on May 28, 2015. Prices increased marginally despite slowing demand from China.

ETFs like the SPDR Gold Trust (GLD) and the iShares Gold Trust (IAU) followed price trajectory gold prices and increased marginally in yesterday’s trade. Similarly, the VanEck Vectors Gold Miners ETF (GDX) also rose in Thursday’s trade.

The increase in gold prices benefits gold producers like Agnico Eagle (AEM), Royal Gold (RGLD), and Primero Mining (PPP). These stocks account for 11% of GDX.

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China’s gold imports from Hong Kong dropped for the third month in a row. The consensus of gold prices declining further prevented gold buyers from actively buying gold. China and India are the largest gold consumers. According to World Gold Council records, they own a 54% market share of the global gold demand. The slowing demand is putting pressure on gold prices. China’s gold imports fell to 46.6 metric tons in April 2015—compared to 61.8 tons in March 2015 and 65.4 tons last year.

The strong dollar will continue to put pressure on gold prices in the near term. The US dollar is appreciating on the consensus of an interest rate hike by the Federal Reserve in the short term. The rising dollar makes gold expensive. So, the demand for gold drops. As a result, prices decline.

This is the fifth up day over the last ten trading sessions. Prices declined by 0.50% more on the average down days than on the average up days, over the same period. Gold had an average performance across all of the other commodities in yesterday’s trade. Prices gained 0.54% YTD (year-to-date)—led by seasonal demand from India. Gold’s long-term trend is still downward due to the strong US dollar.

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