Gold prices reverse previous day's gains, fall on weak US data

Posted By: Religare
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Gold prices reverse previous day's gains, fall on weak US da
Gold prices reversed its previous day's gains and fell by 0.59 per cent on Friday as investors sold the precious metal for the safety of the U.S. dollar after a wave of weaker-than-expected U.S. economic data which included weak Chicago purchasing managers' index, downbeat U.S. labor market data and reports that U.S. economy grew at a slower rate than initially estimated.

Gold futures for June 2012 contract, at MCX, were trading at Rs. 28,977 per 10 grams, down by 0.59 per cent after opening at Rs. 29,130 against the previous closing price of Rs. 29,148.

Sentiment weakened further as the dollar rose against other major counterparts ultimately sending the prices of the precious metal falling. The dollar index for June 2012 future was up 0.10 per cent to trade at 83.12 on the Inter-Continental Exchange (ICE) US dollar future index at 11.17 AM IST today. A stronger dollar reduced demand for precious metals as an alternative investment and makes dollar-priced commodities expensive.

Moreover, the demand for the yellow metal in India carried on being sluggish due to a volatile rupee and as the nationwide strike call by opposition parties to protest petrol price rise curbed retail demand.

At the Commodity Exchange (COMEX), gold future for August 2012 delivery traded at US$1,559.8 per ounce, down by 0.28 per cent. It opened at US$1,561.8 against the previous closing price of US$1,552.5. It touched the intra-day low of US$1,552.5. (At 11.20 am IST).

Read more about: gold
Story first published: Friday, June 1, 2012, 13:30 [IST]
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