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Gold prices rose slightly, while recovering from a three-year low that was reached yesterday, however, still remains on track for its largest weekly decline in nearly two years. We add that the value of the precious metal fell by 7%. This trend was primarily related to the alleged head of the U.S. Federal Reserve, which signaled the decline in asset-purchase program later this year if the economy shows signs of recovery.
Experts suggest that the prices of precious metals will consolidate near current lows, but there is little chance of a significant rebound. Also, they added that so far there is little sign of the revenge increasing physical purchases, as recent statements spooked market participants, and they prefer to stay out of the market.
We also add that the gold reserves in the exchange-traded fund, which is a popular way to invest in times of financial crisis, fell more than 485 tons this year.
The largest fund SPDR Gold Trust said yesterday that inventories fell by 4.5 tons, the lowest level in more than four years, appeared on 26% below its peak (December 2012) in the amount of 1,353 tons.
In addition, it was reported that the volume of purchases from the largest consumer of gold - India remained subdued, despite the drop in prices on Thursday, in contrast to the significant purchases during the April decline. However, traders have reported a surge in demand from China, which is the second largest consumer of gold.
The cost of the August gold futures on COMEX today rose to 1290.00 dollars an ounce.
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