Gold reverses previous day's gains, falls on strong US data

Gold reverses previous day's gains, falls on strong US data
Reversing its previous day's gains, gold prices fell on Wednesday at te domestic markets as the upbeat economic data out of US dampened expectations for further stimulus measures from the Federal Reserve.

Stimulus measures tend to boost outlook for the bullion which is a hedge against the inflationary risk of monetary stimulus. U.S. Census Bureau said new home sales rose by 15.6 per cent to a seasonally adjusted 437,000 units in January, compared to expectations for an increase to 381,000 which Standard & Poor's with Case-Shiller said its house price index rose at an annualized rate of 6.8 per cent in December from a year earlier.

Moreover, Conference Board, a market research group said its index of consumer confidence rose to 69.6 in February from a reading of 58.4 in January. Gold futures for April 2013 contract, at MCX, were trading at Rs. 29,916 per 10 grams, down by 0.58 per cent after opening at Rs. 30,030 against the previous closing price of Rs. 30,092. It touched the intra-day low of Rs. 29,905 till the trading. (At 11.27 AM today).

However, losses were curbed as uncertainty over the political situation in Italy in the midst of inconclusive general elections renewed worries over Europe's debt turmoil, boosted safe haven demand for the bullion.

At the Commodity Exchange (COMEX), gold future for April 2013 delivery traded at US$1,610.4 per ounce, down by 0.32 per cent. It opened at US$1,613.6 against the previous closing price of US$1,615.5. It touched the intra-day low of US$1,610.3. (At 11.28 am IST).

Read more about: gold
Story first published: Wednesday, February 27, 2013, 13:30 [IST]
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