Gold prices fall on euro zone concern, weak buying activity

Gold prices fall on euro zone concern
Gold prices fell on Friday as a result of persistent concerns about Spain and lackluster US economic data.

Moreover, the weak US jobless claims data raised the possibility of further monetary easing measures by the Federal Reserve to strengthen the economic recovery in the US, the world's largest economy.

Gold futures for June 2012 contract, at MCX, were trading at Rs. 28,653 per 10 grams, higher by 0.02%  after opening at Rs. 28,657 against the previous closing price of Rs. 28,647.

The investors were worried about the euro zone's fiscal health. Rumors of a potential downgrading of France's credit rating which was later denied pushed up French debt yields which also influenced the prices.

Sentiment weakened further as physical gold buying in Asia was sluggish even as India approaches a key gold-buying festival early next week.

However, traders are closely watching the Federal Open Market Committee meeting next Tuesday and Wednesday. The sluggish economic data has kept up hopes for another round of quantitative easing.

Read more about: gold, futures, mcx
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