[heading]Gold Price Lower After Easter Holiday[/heading]
After a price rise and signs of bullishness, gold has fallen to a two-and-a-half-week low due to thin trading after the Easter Holiday.
Gold’s price was hurt in part by technical selling after it could not hold the $1,300 an ounce level with many people foreseeing a bottom at $1,280.
“One aspect is that the market is pretty thin today and liquidity is going to be constrained,” said Victor Thianpiriya, an analyst at ANZ.
The reason for the thin market is that markets in Australia, Hong Kong and London are closed Monday for the Easter Holiday.
“But people have been spooked by the near 10-tonne decline in SPDR holdings that we saw last week.”
SPDR Gold Trust, which is the world’s top gold ETF, saw outflows of 9.3 tonnes last week.
Before last week, the fund had gained 6.2 tonnes from the beginning of 2014.
In 2013 huge outflows from the trust paralleled the 28 percent drop in gold’s price as investors went into equities.
The fund outflows seem to go against recent sentiment which foresaw higher gold prices due to geopolitical tensions in Ukraine which boosted the perception of gold as a safehaven.
Three people were killed in a gunfight in the early hours of Sunday near a Ukrainian city controlled by pro-Russian separatists. This has not led to a spike in gold prices.
But, gold is not cheaper for everyone, as the dollar index increased on Monday, which makes gold more expensive for holders of other currencies.