Gold prices extend gains, rise on monetary easing hopes, safe-haven buying

Posted By: Religare
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Gold prices extend gains, rise on monetary easing hopes
Gold prices extended gains rising for the second day on Friday as the investors sentiment improved due to an unexpected decline in the regional U.S. factory activity which in turn raised expectations for more monetary easing in the US, world's largest economy.

The Philadelphia Federal Reserve Bank said its business activity index dropped to minus 5.8 from 8.5 in April, dampening economists' expectations of a gain at 10.0. Gold futures for June 2012 contract, at MCX, were trading at Rs. 28,871 per 10 grams, up by 1.21 per cent at 3.20 pm IST, after opening at Rs. 28,598.

Sentiment improved further as a result of the commencement of safe haven buying activity by the investors in the midst of rising worries over the health of Spain's banking sector.

The yellow metal's safe haven appeal was boosted after reports that Moody's may be gearing up to declare widespread downgrades on Spain's banking sector.

Read more about: gold, mcx, futures
Story first published: Friday, May 18, 2012, 13:31 [IST]
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