Wednesday, 21 August 2013

Gold Fragile Ahead Of FOMC

Losses in gold deepened with the US dollar trading higher and sharp drop in the crude oil prices. Fed policy is the center of attention, with the U.S. central bank's Federal Open Market Committee meeting minutes due later today.
European stock markets traded mixed in early action on Wednesday, with investors closely awaiting the minutes from the latest U.S. Federal Reserve meeting, which could shed more light on the potential reduction of asset purchases. France's CAC 40 index rose 0.3% to 4,041.93, while Germany's DAX 30 index was slightly lower at 8,297.30. The U.K.'s FTSE 100 index lost 0.3% to 6,434.87.
Comex gold for December delivery lost $8.9 to $1,363.7 an ounce on the New York Mercantile Exchange. Yesterday, it ended higher by $6.90, or 0.5%, to settle at $1,372.60 an ounce.
September silver futures extended yesterday's losses, breaking below $23 an ounce. Yesterday, it fell 9.5 cents, or 0.4%, to end at $23.07 an ounce, extending Monday's 16-cent decline.
The downward drift came as the dollar edged higher, with the ICE dollar index rising to 80.937 from 80.901 late Tuesday in North America. The minutes, due to be released at 2 p.m. U.S. Eastern time Wednesday, are expected to provide clues as to when the central bank will begin rolling back its stimulus.
However, the Indian gold futures are up due to stark weakness in the Indian Rupee. The October gold futures are trading up Rs 18 at Rs 30830 per 10 grams. The metal should face a resistance near Rs 39990 levels.
The Indian rupee opened lower at 63.44 per dollar versus 63.25 yesterday. Dollar weakened to trade sub 81 levels. The euro-dollar sees a smart upmove to a 6-month high of 1.34 levels.
The Reserve Bank has announced another set of measures to rescue the rupee, bonds, and bank stocks. The RBI said that it will purchase Rs 8,000 crore worth of bonds via open market operations on Thursday. It added that it will calibrate its purchases in the future, when needed.

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