After spending much of December correcting from the steep upward price run which dominated the fi nal quarter of 2009, gold prices through the first
half of January started to pick up in response to improved physical interest and some fresh investor buying. Though this gold bounce was not entirely
convincing, in dollar terms at least gold reached its quarterly high of $1,158 on the morning of the 11th January.

After a brief period of attempted consolidation above $1,130, it then succumbed to the malaise that spread across a number of the fi nancial
markets in the second half of the month, following President Obama’s banking reform proposal and increasing evidence of a tightening in Chinese
monetary policy. As a result, gold subsequently fell to its quarterly low of $1,052.25 on 5th February (a.m. fi xing). After a slight recovery, the rest of the
quarter saw prices remain largely range bound, trading in a narrow $75 window around $1,110, even despite a press release from the IMF stating
that they had thus far been unable to fi nd a buyer for the remaining 191.3 t of gold it plans to sell, and that it would now consider starting sales on the
open market.

The fi rst quarter of the year is typically not an important gold-purchasing season. Despite this, underlying demand appeared to hold up well, boosted by the Chinese New Year, lower scrap supply and additional impetus from India, where a bullish outlook on price at a consumer level has