Gold falls as JP Morgan cuts price outlook, strong dollar and ETF outflows

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Gold falls as JP Morgan cuts price outlook, strong dollar
Gold prices extended losses, falling for the second day on Wednesday at the domestic markets after Wall Street bank JP Morgan cut its 2013 price forecast for the precious metal. JP Morgan cut its 2013 gold price forecast to USD1,595 a troy ounce, down from a previous estimate of USD1,745. Gold futures for June 2013 contract, at MCX, were trading at Rs. 26,409 per 10 grams, down by 0.01 per cent after opening at Rs. 26,481 against the previous closing price of Rs. 26,411. It touched the intra-day low of Rs. 26,406 till the trading. (At 11.11 AM today).

Sentiment weakened further as the holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to 1012.25 tonnes, their lowest since February 2009.

Moreover, stronger greenback makes gold expensive for those holding other currencies, thus reducing demand. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, was trading 0.28 per cent higher at 84.334 on the Inter-Continental Exchange (ICE) at 11.08 am IST.

However, losses in the yellow metal were curbed as physical demand for gold has picked up in India, the biggest bullion consuming nation, due to the ongoing marriage season.

At the Commodity Exchange (COMEX), gold future for June 2013 delivery traded at US$1,386.5 per ounce, up by 0.55 per cent. It opened at US$1,379.9 against the previous closing price of US$1,378.9. It touched the intra-day high of US$1,389.6. (At 11.11 am IST).

Read more about: gold
Story first published: Wednesday, May 29, 2013, 13:30 [IST]
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