Wednesday, 26 June 2013

Gold Gets Hammered On Strong US Data

Gold futures got hammered further in the Asia electronic session today on strong US economic data which strengthened the US dollar and also supported the early tapering of U.S. monetary stimulus measures.
The U.S. dollar rose against rivals on Tuesday after a string of strong economic data reinforced expectations the Federal Reserve will move to slow its program of asset purchases later this year.
Several housing reports flowed in on Tuesday. U.S. home prices rose 2.5% in April, the biggest monthly increase ever, according to S&P/Case-Shiller data. A home-price report by the Federal Housing Finance Agency showed a gain, albeit more modest, of 0.7% in April adjusted for seasonality. New-home sales rose 2.1% in May to an annual rate of 476,000, their highest rate since mid-2008.
Additionally, durable-goods orders increased in May for the second month in a row, rising 3.6% to a seasonally adjusted $231 billion. Consumer confidence in June surged to a reading of 81.4, its highest level in more than five years.
The ICE dollar index which measures the U.S. unit against six other major currencies, rose to 82.553 from 82.412 late Monday in North America. The euro— which makes up more than half of the comparative basket used for the ICE dollar index by weighting — fell to $1.3095 from $1.3122.
Gold for August delivery slipped to as low as $1242.6 an ounce so far in the session today. Yesterday, it ended lower by $2 to close at $1,275.10 an ounce.
MCX Gold futures have however been cushioned by the extra soft Rupee. The August bullion futures may open today’s session near Rs 26200 levels with support around Rs 26000 levels. So far in the month of June the Indian Rupee has tumbled by more than 5% whereas the gold futures have shed just 3%.
Source by Commodity Insights

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