Gold rises for second day on Merkel's comments

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Gold rises for second day on Merkel's comments
Gold prices rose for the second day on Friday on heavy buying activity of the yellow metal after German Chancellor Angela Merkel's comments which exuded her support for further action from the European Central Bank to tackle the weakening euro debt crisis. Merkel urged her European partners to act faster towards a closer integration of fiscal policies to deal with the crisis.

Gold futures for October 2012 contract, at MCX, were trading at Rs. 30,157 per 10 grams, up by 0.18 per cent after opening at Rs. 30,120 against the previous closing price of Rs. 30,104. It touched the intra-day high of Rs. 30,165 till the trading

Sentiments were further boosted by the hopes that the Federal Reserve will stimulate the economy via quantitative easing on account of the downbeat data out of US. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 11 rose by 2,000 to a seasonally adjusted 366,000 whereas the Federal Reserve Bank of Philadelphia said that manufacturing in the Philadelphia region shrank for the fourth straight month in August. It said its index of regional manufacturing activity had a reading of -7.1 in August. Similarly, U.S. Census Bureau that U.S. housing starts fell by 1.1 per cent in July to a seasonally adjusted 0.746 million.

However, gains in the yellow metal were curbed as the World Gold Council (WGC) said that the demand for the yellow metal fell to Rs 50,773 crore in the second quarter as against Rs 64,000 crore in the corresponding period last year as record high prices kept buyers and investors out of the market.

Read more about: gold
Story first published: Friday, August 17, 2012, 13:31 [IST]
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