Gold prices managed to snap a three-day decline, although weakness in the euro meant that the rise was tempered slightly, despite data showing increased central bank purchases last month.
During the afternoon the euro was able to pare its losses against the US dollar, in spite of economic news that showed manufacturing continued to slow across Europe. Even German data was weaker, showing that the eurozone’s economic powerhouse is being infected by the crisis of confidence sweeping the continent. IMF data showed that central bank holdings of gold grew yet again in April, as the Philippines, Mexico, Ukraine and Russia all added to their holdings.
The Philippines in particular made the largest purchase in over four years, a continuation of the trend of developing countries buying physical gold as a means of diversifying their holdings away from the US dollar.