Prices register strong weekly gains though
Bullion metals ended in the red on Friday, 26 April 2013. Prices ended lower following profit taking after prices rose earlier during the week. But prices still ended the week higher on the back of growing physical demand.
Gold for June delivery shed $8.40, or 0.6%, to settle at $1,453.60 an ounce on Comex division of the New York Mercantile Exchange. Gold futures saw their first weekly gain in five weeks, up 4.2% for the week.
On Friday, May silver also slid into the red and to a session low of $23.59 per ounce after trading as high as $24.49 per ounce earlier in the day. Unable to regain momentum, it settled at $23.74 per ounce, booking a gain of 3.3% for the week.
Early Friday, the metal posted gains on news that the U.S. economy grew less than expected in the first quarter had lifted the metal's safe-haven appeal. Prices had been up by more than $10 an ounce from Thursday's close, then lost steam and turned lower within a roughly 10-minute time span during the Comex trading session.
According to the advance report, first quarter GDP grew at an annualized rate of 2.5%. That was up from a 0.4% gain in the final quarter of last year, but below the expectation of a 2.8% gain.
A deeper look into the data sets the tone for a likely severe deceleration in trends during the second quarter. The report detailed that just about all of the gains in the first quarter came from consumption and inventories, both of which are likely to experience a pullback over the next three months. Furthermore, government spending, which fell 4.1% in the first quarter after declining 7.1% in Q4 2012, is set to fall by a larger amount during the second quarter as the effects of the sequestration become more pronounced.
In a report on Friday, the World Gold Council touted gold's benefits in mitigating market risk and preserving wealth and said that gold is far from being overbought. The report stated that annual investment demand for gold has grown to 1,538 metric tons in 2012 from 348 metric tons in 2001.
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