Gold prices off lows on physical buying

Gold prices are treading water having come down to the lowest level in the past six-months owing to a huge surge in the equity markets world over. Betting on the interest rate hike by the US Fed has undermined the demand of gold in recent months.

After hitting six-month low the prices of yellow metal have started to creep up slowly as it gained close to half a percentage points in the previous trading session led by physical buying.

The spot gold price was recently quoted at $1,215.65/1,215.95 per ounce, up $7.30 on the previous close. Trade has mostly ranged from $1,206.85 to $1,217.05 so far.

The low prices have induced some interest in the physical market. Russia purchased the most gold in 18 years in October – central bank holdings rose to 50.9 million ounces from 49.6 million ounces, ANZ said in a note.

However, ETF investors are continuing to pull out money from the metal as holding has dropped by 2.5 % to 2109 tonnes as of November 18.

Gold will be closely tracked in the coming weeks as Fed meets will increase interest rates for the second time in recent history.