Gold prices extended losses, falling by 0.59 per cent on Friday at the domestic markets as a result of upbeat US data which raised speculation that the US Federal Reserve may start tapering QE in the near-term as the economy improves, dimming the appeal of the precious metal, which is a hedge against the inflationary risk of monetary stimulus. Gold futures for August 2013 contract, at MCX, were trading at Rs. 25,226 per 10 grams, down by 0.59 per cent after opening at Rs. 25,247 against the previous closing price of Rs. 25,375. It touched the intra-day low of Rs. 25,106 till the trading. (At 11.35 AM today).
A fall in jobless claims last week, a rebound in consumer spending last month and a bigger than expected rise in pending home sales in May signaled an acceleration in the US economy.
Sentiment weakened further as holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, are near four-year lows.
At the Commodity Exchange (COMEX), gold future for August 2013 delivery traded at US$1,208 per ounce, down by 0.30 per cent. It opened at US$1,199.5 against the previous closing price of US$1,211.6. It touched the intra-day low of US$1,179.4. (At 11.41 am IST).