CN: Gold prices decline on falling US, Europe equity mkts
Gold traded firm in Asian hours but later, started declining because of falling equity markets in Europe and US. European equities fell on concerns that German business confidence dropped for the first time in 11 months in February while in late trades, US equities were also seen plunging due to falling consumer confidence. The bullion took cues from falling equities. However, gains in the dollar index also curbed precious metal’s alternative investment demand. The dollar index recovered from day’s low of 80.088 to close at 80.915, +0.51 percent.
US gold futures for April month delivery closed 0.9 percent lower at $1,103.20/oz after hitting session high of $1,121.70/oz during Asian hours.
Falling crude oil prices also led bullion prices to decline. Crude oil broke five-day rally of price rise and fell 1.62 percent to $78.86/barrel yesterday.
SPDR gold holdings stood at 1,106.99 tonnes as of Feb. 23, down 0.91 tonnes from the previous business day.
Equities traded higher during Asian hours but fell in Europe and US because of confidence measures tumbling down.
Domestic gold futures tracked losses in international markets and closed 0.61 percent down at Rs. 16,591/10 gm. Bullion prices traded in the range of Rs. 16,557 – Rs. 16,767/10 gm. Indian rupee was little changed at 46.24, depreciation of 0.05 percent.
Outlook
The bullion opened higher in Asia on account of weak dollar. The dollar weakened on concerns that the Fed may keep its benchmark interest rate near to zero levels to support the domestic economic growth. The dollar index is down by more than 0.2 percent which is driving bullion prices higher in Asian trades. Gold now trades at $1,107.30/oz on Comex’s globex platform. Few economic data releases in the form of declining industrial new orders in the euro zone and rising new home sales in the US are likely to support the dollar for the day which could cause bullion prices reversing to declines in later sessions. Asian equities opened lower taking cues from falling American equities yesterday. Depreciation in Indian rupee and higher international gold prices suggest a flat to higher opening in gold futures on MCX platform.
