Some Buying Emerges In Gold After Prices Touch Multi Month Lows Gold is trading slightly higher today after witnessing a ferocious drop yesterday. Theshiny metal extended its losses after being unable to hold near the key $1300 per ouncelevels last week. A combination of dollar strength, rising geopolitical worries and weakdemand prospects took a toll on the metal. COMEX Gold slipped in a flash after breakingunder $1280 and bottomed out near $1260 per ounce mark. The metal has gained a bit onbargain hunting in Asia though, currently trading at $1269.50 per ounce, up $4.60 perounce on the day. MCX Gold futures are trading at Rs 27592 per 10 grams, up Rs 38 per 10grams or 0.14% on the day. The US dollar rallied to fresh one year high yesterday, nearing close to 1.3100 levelsagainst the Euro. The US manufacturing expansion gained further ground in August,according to a survey released Tuesday by the Institute for Supply Management. The upbeatreading has added to the expectations of acceleration in US economic growth in the secondhalf. The ISMs manufacturing purchasing managers index jumped to 59 in August from 57.1in July- setting at its highest level in three and half years. Ukraine has stated that Russian forces have seized the coastal town of Novoazovsk andseveral villages near the border with Russia, part of a wider assault yet again. UkrainianPresident Petro Poroshenko called for an emergency meeting of the United Nations SecurityCouncil and the European Council to respond to what he called the incursion of Russianforces. The European Union is considering expanding sanctions against Russia amid theUkraine conflict. The greenback is quoting at 1.3138 agasint the Euro right now. The dollar is expectedto maintain its gains ahead of the European Central Bank meeting on Thursday. Dollarcruised higher as data on Friday showed inflation in the euro zone slipped to a freshfive-year low of 0.3% in August, well below the ECBs target danger zone of 1%. This couldkeep advances under check in gold prices. Any further rally is possible only after a clearbreak above $1300 levels. Gold has been dented by demand worries in last few weeks. Chinese demand worries hadescalated selling pressure in gold over last few days. Chinas gold imports from Hong Kongin July fell by 42% from a month earlier, according to the Hong Kong Census and StatisticsDepartment today, media reports quoted. The metal had dropped nearly 28% in 2013 before arather strong reprisal in first quarter of the current year. As per the latest Gold Demand Trends report released by World Gold Council, world golddemand for Q2 2014 was 964 tonnes, down 16% year on year from 1,148 tonnes, central bankpurchases rose 28 % year on year, to 118 tonnes from 92 tonnes, total bar and coin demandfell by 56% year on year to 275 tonnes from 628 tonnes, ETF outflows were 40 tonnes, atenth of the outflows seen in the same period last year. Powered by Commodity Insights
Posted on: Wed, 03 Sep 2014 07:06:04 +0000
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