On Monday futures on Gold declined amid weakening geopolitical instability thanks to the efforts aimed at ceasefire in the Middle East and US budget coordination. By the end of COMEX trades, June futures on Gold quotations dropped by USD 6 (0.4%) down to USD 1468.10 per troy ounce. During the trades futures reached a new all-time high of USD 14678 per ounce.
April futures lost USD 6 (0.4%) and constituted USD 1467.40. On Sunday evening The African Union representatives met with Libyan leader Muhammar Gaddafi and announced that he accepted their offer to cease fire. Yet it is unclear whether Gaddafi will retire then. The uncertainty on the market eased and investors’ inclination to risk intensified; the market participants have been tending to transfer their funds from Gold into more risky assets such as stocks which are more profitable. On Friday evening the leaders of US Republican and Democratic parties came to the consensus over the issue of reducing expenditures by the end of the financial year. The work of the federal government was not interrupted.
The prices for Gold grew amid the concerns over possible suspense in the government functioning as this metal is considered to be an instrument of hedging against political risks. The strengthening US dollar put pressure upon the Gold prices on Monday. The America currency recovered against the euro. Futures on Gold of which the prices are in US dollars, are becoming more expensive for investors working with foreign currencies when the US dollar is strengthening. Despite the Monday decrease, the prices for Gold are remaining near record levels. Some market observers note that USD 1500 level per ounce is possible to be attained. However, traders have been cautious regarding support ensured to Gold prices by investors’ demand. Managed currency, including hedging funds, boosted their positions amid prices growth for the third week in a row, having increased the volume of net long positions by 8.8% up to 216868 contracts on week March 30 – April 5. Meanwhile, inconsiderable investment flows in Gold-supported index funds which are believed to be an indicator of long-term investments, have been pointing at the weak current growth of the prices for Gold.