“Gold Tips” 16 March 2012
Gold extended gains on Friday as the euro rebounded against the dollar, but the precious metal was heading for its third straight week of losses as a brightening economic outlook in the United States prompted investors to park their money elsewhere.
Although the US dollar took a breather after a rally, the uptrend was seen unbroken after the Federal Reserve offered no clues whether it plans to buy any more major assets to keep interest rates and borrowing costs low -- a move which would lift bullion's safe-haven appeal.
European markets traded on a mixed note today, ahead of the US economic data to be released later in the evening. US unemployment claims are expected to decline by 5100 to 357,100 in the last week. If the data comes as expected then this may provide support to the commodities.
The Reserve Bank of India (RBI) holds repo rate steady at 8.5 percent and reverse repo rate unchanged at 7.50 percent as expected, underscoring its concern about inflation following the sudden spike in global oil prices even as economic growth has turned slow. India's central bank keeps banks' cash reserve ratio unchanged at 4.75 percent.
Spot gold prices increased by 0.3 percent today taking cues from a weaker dollar. The yellow metal touched an intra-day high of $1648/oz and was hovering around $1645/oz. On the MCX, gold April contract increased by 0.4 percent on account of a weaker Rupee and was trading at the level of Rs.27,541/10gms.
