UNITED STATES June 05 2014 NEW YORK (Scrap Register): Gold prices softened significantly this week, falling towards Barclays Q2 14 price forecast of $1250 an ounce, as much of the rest of the complex fell in a similar fashion.

The active August gold contract on the COMEX division of the New York Mercantile Exchange  was last down $0.20 at $1,244.40 an ounce. Spot gold was last quoted down $0.70 at $1,244.75.

Barclays expects this momentum to continue, at least for gold and silver. Palladium, meanwhile, was the standout and continues to outperform its precious metal counterparts.

The more industrially biased, the better the metal performed over the past week, as palladium continued to outperform, while the rest of the complex had noticeable falls w/w.

While platinum fell, it did not fall to the same extent as silver or gold, with the latter two moving towards our Q2 14 price forecasts of $18/oz and $1250/oz, respectively, and we still think that gold will move lower over the remainder of the quarter.

Over the past week, strength in equities and the dollar has eaten into gold’s recent rise, contributing to the softening in gold prices over the past week.

Physical gold demand has not responded strongly lately, albeit it has not had to make up for the heavy ETP outflows that it did last year. Gold-backed ETP holdings have risen nearly 9 tons, albeit the month-to-date figure remains in marginally negative territory.

As for physical demand, the latest data from Hong Kong indicate that mainland Chinese gold imports from Hong Kong fell significantly in April, with total imports dropping from 105.9 tons to 80.8 tons and net imports decreasing from 85.1 tons to 67.0 tons from March to April, despite prices being noticeably lower.

In May, demand, as proxied by volume traded on the Shanghai Gold Exchange, indicates a pickup w/w, as USD gold prices have softened. Elsewhere in Asia, gold par premiums have fallen in Hong Kong and Singapore, from $1.10/oz to $1.00/oz and from $1.00/oz to $0.70/oz, respectively, while they have remained flat in Tokyo at zero. Bar premiums have become increasingly muted versus the heights reached last year.