Gold prices extend losses as Spain concern weakens euro

Gold prices extends losses as Spain concern weakens euro
Gold prices extended losses, falling for the second day on Wednesday as the euro weakened due to the deteriorating financial condition of Spain which increased concerns regarding a euro crisis. Moreover, the strengthening of US dollar impacted gold prices. Gold futures for June 2012 contract, at MCX, were trading at Rs. 28,846 per 10 grams, down by 0.05 per cent after opening at Rs. 28,845 against the previous closing price of Rs. 28,859. It touched an intra-day low of Rs. 28,81. 

The dollar rose against major counterparts ultimately sending the prices of the precious metal falling. The dollar index for June 2012 future was up 0.13 per cent to trade at 82.58 on the Inter-Continental Exchange (ICE) US dollar future index at 11.17 AM IST today. A stronger dollar reduced demand for precious metals as an alternative investment and makes dollar-priced commodities expensive.

Moreover, the weakness in the Indian rupee currency has dampened demand prospects for the precious metal and buying activity is expected to remain sluggish.

At the Commodity Exchange (COMEX), gold future for August 2012 delivery traded at US$1,550.6 per ounce, down by 0.025 per cent. It opened at US$1,555.8 against the previous closing price of US$1,551. It touched the intra-day low of US$1,546.1. (At 11.19 am IST).

Dion Global Solutions

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