Gold prices rise for the fourth day as Greece concerns fade

Posted By: Religare
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Gold prices rise for the fourth day as Greece concerns fade
Gold prices continued its northward journey, rising for the fourth day on Tuesday due to the heavy buying activity of the commodity as the traders were quite optimistic that Greece will stay in the euro area which in turn boosted the euro and reduced demand for the safe-haven US dollar. Gold futures for June 2012 contract, at MCX, were trading at Rs. 29,037 per 10 grams, up by 0.25 per cent after opening at Rs. 28,994 against the previous closing price of Rs. 28,965. It touched the intra-day high of Rs. 29,063 till the trading. (At 11.16 AM today).

Sentiment improved further as the dollar weakened against other major currencies which sent the prices of gold rising. The dollar index for June 2012 future was down 0.21 per cent to trade at 82.26 on the Inter-Continental Exchange (ICE) US dollar future index at 11.00 AM IST today. A weaker dollar increases the demand for precious metals as an alternative investment and makes dollar-priced commodities cheaper.

At the Commodity Exchange (COMEX), gold future for June 2012 delivery traded at US$1,573.3 per ounce, up by 0.28 per cent. It opened at US$1,573.6 against the previous closing price of US$1,568.9. It touched the intra-day high of US$1,583.5. (At 11.04 am IST).

However, gains in the precious metal were restricted due to a surge in Spain's borrowing costs in the midst of reports that the government was getting ready to recapitalize its fourth largest bank, Bankia with sovereign debt.

The investors will keep an eye on China's PMI data and US non-farm payrolls data expected to come out later this week in order to estimate the health of the world's two largest economies.

Dion Global Solutions

Read more about: gold
Story first published: Tuesday, May 29, 2012, 13:30 [IST]
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