Monday, 27 May 2013

Dollar Boosts Gold; Floor Trading Closed

Gold got a boost in the thin trades today helped by weakness in the US dollar and also as the central banks increase gold reserves.
Russia, Kazakhstan and Azerbaijan increased their gold reserves in April, according to data on the International Monetary Fund website on Monday. Russia bought 269,000 troy ounces--bringing its reserves to 31.8 million ounces. Kazakhstan added 85,000 ounces. Its stocks are now 4 million ounces.
The Republic of Azerbaijan bought 32,000 troy ounces last month--increasing its reserves to 129,000 ounces, the latest IMF figures showed. It was the fourth consecutive month of purchases by Azerbaijan's central bank. In December it had no reserves.
Holdings at Turkey's central bank rose 586,000 ounces in April to 13.73 million ounces. It has begun accepting gold as collateral from commercial banks and analysts said this is the main reason for recent increases rather than purchases.
Gold futures for August delivery are trading at $ 1392.3 down $5.7 on the Comex division of the New York Mercantile Exchange. On Friday, it edged down 0.5% to settle the week at $1,387.50 a troy ounce. The metal is likely to find support near $1340 levels and resistance near $1415 levels in the near term.
Despite Friday’s modest decline, gold futures rose 2.15% on the week, the biggest weekly advance in a month, due mostly to a broadly weaker U.S. dollar.
The Japanese yen edged higher Monday, extending gains following the U.S. dollar’s worst weekly performance against its rival in about a year. The dollar bought 100.99 yen, down slightly from ¥101.09 on Friday. Last week, the dollar dropped roughly 1.7% against the yen.
In the week ahead, gold traders will be focusing on a flurry of U.S. economic data, including reports on the housing sector, consumer confidence and initial jobless claims. There will be no floor trading in New York on May 27 because of the Memorial Day holiday. All electronic transactions will be booked with May 28 trades for settlement.
MCX June gold are trading up Rs 11 at Rs 26417 per 10 grams. It may face a resistance near Rs 26470-500 levels with support near Rs 26340 levels.

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