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Gold prices could trade sideways next week as the yellow metal could be compelled to contend with opposing forces.
As many as eight of 20 analysts polled in a Kitco Gold Survey said they expected gold prices to trade higher next week, while eight predicted that prices will drop and four forecast prices to trade sideways.
While ongoing geopolitical tensions in Ukraine, Iraq and Gaza could prop up prices, improving US data could dent the precious metal's safe-haven status.
Gold will also take its cues from the minutes of the latest US Federal Reserve FOMC meeting and from a Fed conference next week, where chief Janet Yellen is due to speak.
Adrian Day, chairman and chief executive officer of Adrian Day Asset Management, said: "Though geopolitical tensions have declined significantly in the last few days, one would be foolhardy to believe there could not be another flare-up in any number of world hotspots. This is keeping a bid in the gold market."
Phil Streible, senior market strategist at RJO Futures, said: "Russia is trying to establish a peaceful situation, Iraq is having a leadership change and the Israeli conflict has a ceasefire, so geopolitical risks are falling, pushing gold prices lower."
Commerzbank Corporates & Markets said in a note to clients: "...As the World Gold Council (WGC) also stressed in its report published [on 14 August], gold ETFs have admittedly seen outflows of 40.5 tons in the second quarter, but this was only one tenth of the outflow in the corresponding year-ago period (over 400 tons).
"...Since demand for jewellery, bars and coins has proved very weak of late, overall demand for gold is again more dependent on investors."
"However, investment demand is probably not sufficient to make up completely for weak physical demand in Asia at present, especially since coin sales in the West are likewise modest. On the supply side, second-quarter mining output was up 4% year on year to 765.3 tons, according to the WGC. It is thus on track to exceed last year's record high. Supplies of gold scrap have largely remained at around 262.7 tons, no doubt due in part to low prices," Commerzbank added.
Chinese and Indian demand for gold jewellery has tumbled, amid faltering output growth in both developing powerhouse economies and after consumers took "a more needs-based approach".
The World Gold Council (WGC) report said global demand for jewellery made from the metal slumped by 30% on an annual basis to 509.6 tonnes in the three months to 30 June, 2014. Jewellery accounts for around half of all gold demand.
During the period, India and China purchased 154 tonnes and 143 tonnes respectively of gold, representing annual falls of 50% and 48%.
In the corresponding quarter in 2013, India had purchased 310 tonnes and China 276 tonnes as consumers reacted to a sharp decline in gold prices.
Gold Ends Lower
US gold futures for delivery in December finished at $1,306.20 an ounce on 15 August.
Prices were down 0.37% for the week.
Spot gold traded 0.6% lower at $1,305 an ounce.