Comex gold futures ended on higher note after seesawing in earlier trades. Gold found some grounds as concerns over global economic recovery still loom large and people still want to own gold amidst a lot of fears and problems out there. A weaker dollar might have also given some support to bullion prices.
Comex gold futures rose 0.8% to $1234.40/oz. The dollar lost nearly 0.6% against a basket of the world’s six major currencies, inclusive of 0.90% fall against the Euro alone.
The Euro rose as demand at auctions in Spain, Ireland and Belgium managed to ease debt concerns in the euro area, especially after S&P had downgraded Greece to junk. Euro zone ZEW survey also fell.
Global equities continued to rise as the benchmark MSCI world index closed 1.6% up.
The SPDR Gold Trust maintained its total gold holdings at 1306.14 MT yesterday.
MCX gold also tracked gains in international gold prices and closed 0.55% higher at Rs. 18,664/10 gm. Rupee movement resulted in gold taking volatile moves.
Outlook
Gold is little changed at $1234.70/oz in Asia and the dollar index also remains unchanged at 86.059, 0.04% up. Asian equities are trading in greener territories, showing increased investors’’ confidence.
Economic data from the US in the form of declining PPI, falling housing starts, increasing building permits and rising industrial production suggest a mixed impact on the dollar.
Housing data may not come supportive for the dollar as Federal government’s “tax gain to first-time home buyer policy” expires in June.
Building permits may have also declined with a fall in housing starts and thus, putting pressure on the dollar.
The dollar may continue to give grounds, esp. after the Euro traded down to more than four year low levels. Weaker dollar may provide some gains to gold. MCX gold is expected to open lower with positive bias for the day.
