MUMBAI (Commodity Online): Gold witnessed some follow up buying in Asian trades today but the gains were muted after a terrific surge in the last session.
The metal cut losses yesterday in the overnight trades on COMEX as the Eurozone debt crisis continued to stir the sentiments with traders eying the heavy protests in Athens.
Gold edged higher even as the US dollar was engaged in an impressive rally, indicating that the near term movement in the yellow metal could be independent of the dollar direction.
The US equities tumbled sharply yesterday, as the grim global scenario was made even murkier by an array of weak economic data from the US. Manufacturing activity deteriorated sharply in the New York region in June with the Empire State index fell below zero to -7.8 in June from 11.9 in May, according to latest data released by New York Federal Reserve. This is the first time the index has been below zero since last November.
On the other hand, the US consumer price index climbed a seasonally adjusted 0.2% last month. Consumer inflation has climbed an unadjusted 3.6% over the past year. That's the biggest 12-month increase since October 2008. The core inflation, which strips out volatile food and energy costs, surged by 0.3%, marking the biggest gain since July 2008.
These pointers pulled the US stocks sharply lower, making the major indices give up their previous session's gains. The Dow plummeted by 178.84 points, or 1.5% on the day after plummeting over 200 points during the session. Markets largely ignored a positive industrial production data. The US industrial output rose 0.1% in May and was up 0.6% excluding autos, the largest gain this year.
Gold went up from lows under $1520 on these counts. Gold for August delivery rose $1.8 or 0.1%, to end at $1,526.2 an ounce. The MCX Gold futures for August added Rs 73 to close at Rs 22,421 per ten grams after testing a high of Rs 22,522 per 10 grams.
The commodity is quoting at $1527.10, up 90 cents on the day, after hitting highs above $1530 levels. Dollar continues to rise, hitting three week highs under 1.4110 against the Euro. This could keep Gold under some check but given the yesterday's show, a major drop is ruled out in the metal.
MCX Gold is trading at Rs 22457, up Rs 36 per 10 grams on the day. Prices could rise towards Rs 22500 levels as long as Rs 22400 holds.
