GOLD TUMBLES AFTER FED MINUTES, AS DOLLAR SOARS Gold exchanged mildly lesser in electronic transaction Thursday after moving back and forth in the wake of the latest Federal Reserve policy-meeting minutes. Comex gold for December delivery missed $8.10, or 0.6%, to deal at $1,362 an ounce. The contract had settled $2.50 lower Wednesday on the New York Mercantile Exchange, but then gyrated between losses and gains after the Fed minutes showed the U.S. central bank stayed on course to start cutting its stimulus before year’s end. Shortly after the Fed minutes, December gold slide to around $1,367.70 an ounce but then quickly surged above $1,378. Gold has proved sensitive to U.S. monetary policy, in part because the Fed’s ultra-loose policy has triggered gold purchasing as a hedge versus inflation. Early Thursday, gold futures saw renewed volatility after HSBC reported that a preliminary reading of its monthly China manufacturing survey showed a surprise swing out of contraction for the sector. The data sent December gold to above the $1,367 level, up from $1,361.10 just ahead of the data, but the contract quickly moved lower. A stronger U.S. dollar aided fuel the losses for gold, with the ICE dollar index at 81.486 midday Thursday in East Asia, up from 81.268 late Wednesday in North America. HSBC analysts James Steel and Howard Wen cited the seasonally low volumes for gold-futures trade, saying that “gold is likely to stay choppy in the near term on thin liquidity.” India — which is currently vying with China for the position of world’s top gold importer — was also in focus for gold traders, as the Indian rupee suffered heavy losses. The rupee set fresh all-time lows on Thursday, with the dollar briefly rising above the 65-rupee level before easing to 64.77 rupees, which nonetheless marked a 1% advance for the day, according to FactSet data. “A weak rupee leads to more expensive gold prices in local currency terms as bullion is typically priced in dollars,” wrote HSBC’s Steel and Wen. “While this may soften demand, we expect physical buying in India to pick up later in the year ahead of the festive Diwali holiday,” they wrote, referring to the five-day Hindu festival of lights, which begins this year on Nov. 3. In other metals-futures trade, September silver downgrade 18 cents, or 0.8%, to $22.79 an ounce, extending its 11-cent loss on Wednesday. October platinum marched $4.60 down, or 0.3%, to $1,514,50 an ounce, but the September contract for sister-metal palladium spiked $1.20, or 0.2%, to $748.10 an ounce. September copper advanced 2 cents for a 0.7% gain to $3.33 a pound, erasing some its 3-cent loss on Wednesday. Source: mt5/
Posted on: Thu, 22 Aug 2013 09:50:26 +0000
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