Gold prices break five day winning streak, as dollar gains

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Gold prices break five day winning streak, as dollar gains
Gold prices broke the five-day winning streak and fell on Wednesday as investors sold the precious metal for dollars after former Greek Prime Minister Lucas Papademos stated that they cannot rule out the possibility that Greece could exit the euro area. Gold futures for June 2012 contract, at MCX, were trading at Rs. 28,925 per 10 grams, down by 0.56 per cent after opening at Rs. 29,026 against the previous closing price of Rs. 29,087. It touched the intra-day low of Rs. 28,906 till the trading. (At 11.00 AM today).

Sentiment weakened further as the dollar strengthened against a basket of other currencies which sent the prices of the precious metal falling. The dollar index for June 2012 future was up 0.19 per cent to trade at 81.64 on the Inter-Continental Exchange (ICE) US dollar future index at 10.54 AM IST today. A stronger dollar reduces the demand for precious metals as an alternative investment and makes dollar-priced commodities more expensive.

Moreover, the Indian rupee hit a record low against the dollar and the constant weakness in the local unit has dampened demand of the metal. Rupee touched a fresh low of Rs 55.82 against the U.S. dollar in early trade.

At the Commodity Exchange (COMEX), gold future for June 2012 delivery traded at US$1,558.6 per ounce, down by 1.14 per cent. It opened at US$1,567.4 against the previous closing price of US$1,576.6. It touched the intra-day low of US$1,554.5. (At 10.58 am IST).

Read more about: gold, dollar
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