At the end of 2011, prices dropped to $1,540.90 (£997.598) as “investors liquidated positions to mitigate losses.” Since the beginning of the year, however, increased sales and demand have resulted in a $100 (£64) rise, and as of Thursday 19 January, prices were up to $1,664.32 (£1,077.50).
“The rise in gold price over the last two weeks would have seen investors making a profit of $3,152.64 (£2,041.06) if they had bought a London Good Delivery gold bar weighing one kilogram, or 32 ounces, at the start of trading on Tuesday 3 January at $1,565.80 (£1,013.72) – the equivalent of $50,105.60 (£32,439) – and selling at Thursday’s price of $1,664.32 (£1,077.50), or $53,258.24 (£34,480.1),” said Financial News.
According to the report, gold generally performs well in ‘troubled times’ as it is perceived to be a safe investment, but the current surge is being put down to the approach of the Chinese New Year, in which gold is traditionally bought for gifts and decorations.
Eugen Weinberg, head of commodity research at Commerzbank, said: “January is traditionally a good month for gold sales as a result of various festivities.”
Anne-Laure Tremblay, precious metals analyst at BNP Paribas, said: “Chinese New Year and the demand we have seen in light of this is definitely one supportive factor of the gold price. It has been illustrated by the high level of Chinese imports in November. Chinese demand is one of the key factors in demand for gold. We have seen weak Indian jewellery demand and China is propping this up now.”
Image: Giorgio Monteforti