Gold prices rise for second day on buying activity, weak dollar

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Gold prices rose for the second day on Thursday as a result of buying activity by the investors from talks that the Federal Reserve will take steps to boost its economy via stimulus measures and on speculation that the ECB will buy sovereign debt in the open market after German industrial production fell 0.9 per cent in June, more than forecasts for a decline 0.8 per cent.

Gold futures for October 2012 contract, at MCX, were trading at Rs. 29,921 per 10 grams, up by 0.08 per cent after opening at Rs. 29,886 against the previous closing price of Rs. 29,896.

Sentiment improved further as the dollar fell against other major currencies in turn sending the gold prices rising. The dollar index for September 2012 future was down 0.18 per cent to trade at 82.24 on the Inter-Continental Exchange (ICE) US dollar future index at 11.04 AM IST today. A weaker dollar increases demand for precious metals as an alternative investment and makes dollar-priced commodities cheaper.

Prices also rose after China's annual consumer inflation fell to a 30-month low of 1.8 percent in July from June's 2.2 percent increasing hopes for further policy easing.

At the Commodity Exchange (COMEX), gold future for December 2012 delivery traded at US$1,619.6 per ounce, up by 0.22 per cent. It opened at US$1,615.1 against the previous closing price of US$1,616. 

Read more about: gold
Story first published: Thursday, August 9, 2012, 13:31 [IST]
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