Gold prices rose by 0.04 per cent on Monday at the domestic markets on hopes that the U.S. will avoid a fast-approaching fiscal cliff after President Barack Obama expressed confidence that he and Congress would reach a budget agreement needed to avert the so- called fiscal cliff. Moreover, U.S. Republican and Democratic leaders have agreed on a framework to reform the tax code and government benefit programs next year. Gold futures for December 2012 contract, at MCX, were trading at Rs. 31,654 per 10 grams, up by 0.04 per cent after opening at Rs. 31,666 against the previous closing price of Rs. 31,640. It touched the intra-day high of Rs. 31,706 till the trading. (At 11.28 AM today).
Sentiment improved further as weaker dollar makes gold cheaper for those holding other currencies, thus increasing 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 0.22 per cent lower at 81.082 on the Inter-Continental Exchange (ICE) at 11.28 AM IST.
Moreover, the increasing expectations for further monetary easing in Japan fueled demand as well.
Meanwhile, traders keep an eye on developments regarding the U.S. fiscal cliff along with Tuesday's meeting of the euro group of finance ministers to discuss unlocking Greece's next aid installment.
At the Commodity Exchange (COMEX), gold future for December 2012 delivery traded at US$1,722.3 per ounce, up by 0.44 per cent. It opened at US$1,714.4 against the previous closing price of US$1,714.7. It touched the intra-day high of US$1,723.6. (At 11.29 am IST).