Thursday, 16 May 2013
Gold Continues Downward Rally
Gold futures continued its downward rally on the final day of the week, as the rally in dollar and the equity markets eat away demand for the metal.
Gold for June delivery are trading down $10 at $ 1377 per ounce on the New York Mercantile Exchange. Yesterday, it shed $9.30, or 0.7%, to settle at $1,386.90 an ounce. Including Thursday’s loss, prices have fallen 5.9% in six straight trading sessions. They settled Thursday at their lowest since April 17.
The decline followed news of a decline in the U.S. inflation rate as well as a recent string of gains in U.S. equities that has drawn attention away from gold. U.S. consumer prices fell 0.4% in April, according to the Labor Department. The inflation rate over the past 12 months fell to 1.1% in April from 1.5% in March, marking the lowest level since November 2010.
Other data Thursday showing a jump in weekly U.S. jobless claims, a negative reading on a regional manufacturer business conditions index and a weaker dollar didn’t provide much support for the precious metal.
Jobless claims climbed to a six-week high and the Philadelphia Federal Reserve’s index of business conditions turned negative in May for the first time since February.
Meanwhile, the World Gold Council said in a report on Thursday that investors during the first quarter didn’t buy enough physical gold to offset outflows from gold-exchanged traded funds. Total world gold demand was 963 metric tons in the first quarter, down 13% from the same time a year ago, according to the report.
But the World Gold Council also said total ETF gold holdings in the first quarter were higher than the year-ago period, and demand for jewelry, bars and coins increased.
MCX June bullion futures may open today’s session near Rs 26070 levels with support around Rs 25970 and Rs 25920 levels.