CO:Gold holds around $1540, dollar at one week high
MUMBAI (Commodity Online): Gold holds near $1540 per ounce mark in electronic trades today, witnessing a thin sideways movement as strength in the US dollar cut the gains for the commodity while weakness in most commodity counters also kept sentiments under check.
The US dollar piled up steady gains, rising to its best levels in one week after the ECB kept its interest rates unchanged and signaled a July interest rate rise but watered down the expectations of the central bank being engaged in a tight money policy for a longer period of time.
The ECB has kept its 2012 inflation forecast unchanged; suggesting the pace of euro zone interest rate hikes may be slower than previously thought.
In overnight trades, the US currency broke under 1.4500 against the Euro before giving up some of the gains but bounced back yet again today. The weekly jobless claims for jobless benefits rose last week, another sign of persistent weakness in the economy.
The Labor Department reported that initial unemployment claims increased by 1, 000 to a seasonally adjusted 427,000 in the week ended June 4. The prior week's figure was revised up by 4,000, as well, to 426,000.
However, the US exports continued to reach record levels, expanding 1.3% to $175.56 billion. Imports decreased, easing 0.4% to $219.24 billion. A separate Commerce release showed a slowdown in wholesale inventories and sales slowed in April, a sign businesses were beginning to lose confidence in the economic recovery.
Gold pushed up to a high of $1546.50 per ounce and currently quotes at $1541.30 per ounce, down $1.40 per ounce on the day.
MCX Gold futures for August are quoting at Rs 22615, up Rs 26 on the day. Prices could drop towards Rs 22500 mark on a clear break under Rs 22600 levels in evening moves
