Gold extends gains; rises by 0.31% on weak US data

Gold prices extended gains, rising by 0.31 per cent on Wednesday at the domestic markets as an unexpected contraction in manufacturing in the US Richmond region this month signaled headwinds to the recovery in the world's biggest economy which in turn boosted the case for the US Federal Reserve to maintain QE in the near-term, bolstering the appeal of the precious metal, which is a hedge against the inflationary risk of monetary stimulus.

The Federal Reserve Bank of Richmond's manufacturing gauge fell to -11 in July from 7 in the previous month. Gold futures for August 2013 contract, at MCX, were trading at Rs. 27,660 per 10 grams, up by 0.31 per cent after opening at Rs. 27,600 against the previous closing price of Rs. 27,574. It touched the intra-day high of Rs. 27,691 till the trading. (At 11.35 AM today).

However, gains were curbed after holdings in the SPDR Gold Trust, the biggest bullion-backed Exchange Traded Product (ETP) fell to the lowest level since February 2009 to 929.76 metric tons

At the Commodity Exchange (COMEX), gold future for August 2013 delivery traded at US$1,341.2 per ounce, up by 0.49 per cent. It opened at US$1,347.5 against the previous closing price of US$1,334.7. It touched the intra-day high of US$1,348.7. (At 11.40 am IST).

Read more about: gold
Story first published: Wednesday, July 24, 2013, 13:11 [IST]
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