Gold Bounces Back From Losses
Singapore (Dec 3) old futures bounced back in the early London hours today after it floundered by more than 2% yesterday. However, the metal may have a volatile week with the US GDP, nonfarm payrolls data due later this week which will strongly determine the Fed’s bond buying program.
Gold for February delivery is up $0.6 at $1,222.5 an ounce on the Comex division of the New York Mercantile Exchange. It fell $28.50, or 2.3%, to settle at $1,221.90 an ounce yesterday.
March silver futures also bounced back from the losses, hitting the high of $19.330 per ounce. Yesterday, it tumbled 3.7%, or 74 cents, at $19.29 an ounce the lowest level since July 2013.
In the currencies today, the dollar extended gains versus the yen in Asia as solid U.S. economic data and growing hopes for additional easing step by the Bank of Japan continued to support a bull run for the U.S. currency.
The greenback rose as high as Y103.38, its highest since May 23, as a rise in share prices encouraged traders to dump the safe-haven yen. Monday's remarks by the BOJ Gov. Haruhiko Kuroda suggesting that the BOJ's massive easing steps launched in April would continue after the end of 2014 also prompted traders to sell yen.
While the BOJ is currently proceeding with aggressive easing to double the size of the monetary base it will pump into the economy to Y270 trillion by the end of 2014, mainly through massive purchases of the government bonds, it hasn't disclosed its plan beyond that period.
On the economic front, the Australia's central bank held its key interest rate at 2.5%, meeting widely held expectations. The rate has been at the record-low level since a quarter-percentage point cut in August. The central bank, led by Governor Glenn Stevens, also said the Australian dollar remains "uncomfortably high" although its value has declined this year.
MCX February gold jumped to as high as Rs 28885 levels today up from the low of Rs 28719 per 10 grams. Looking ahead, Friday’s monthly jobs report in the U.S. is likely to dominate trade.
