Gold rose on Friday as the dollar declined but made its biggest monthly drop in five months on signs that recovery in the US economy could lead to the curbing of easy central bank money.
Gold has shed more than 5 percent in November and has lost around a quarter of its value so far this year, which puts it on track to post its first annual loss in 13 years.
“One reason for this, besides the still ongoing ETF (Exchange Traded Fund) outflows, is the weakness of Indian imports, a weakness which could well continue for some time yet,” said Eugen Weinberg, head of Commodity Research for Commerzbank, referring to the weak monthly performance.
“After all, much higher physical premiums are prompting Indian households increasingly to fall back on gold scrap for the wedding season, which is now in full swing.”
Gold has stayed below $1,300 an ounce for the past three weeks and has been largely range-bound in the last few sessions.