Gold Plummets As Dollar Holds On

LONDON (Sept 24)  Gold futures tumbled nearly $10 at $ 1318 an ounce levels in the early London hours today as the US dollar gained against the Euro ahead of the report on German business sentiment, and the Ifo business confidence index.

The ICE dollar index, which measures the greenback against a basket of six rival currencies, rose to 80.475 from 80.452 late Monday in North America.

The US dollar slipped yesterday, after two Fed officials offered downbeat views of the pace of U.S. economic recovery. Atlanta Fed President Dennis Lockhart said the economy is losing some of its dynamism, while New York Fed President William Dudley said the economy was too weak for the central bank to reduce bond buying.

The Fed last week determined the economy wasn’t strong enough to start reducing monetary stimulus and decided to keep buying $85 billion in securities each month, a stance considered negative for the dollar.

European stock markets moved higher at the open on Tuesday, as investors awaited the Ifo survey on German business confidence and U.S. housing data. France's CAC 40 index gained 0.5% to 4,191.31, while Germany's DAX 30 index added 0.3% to 8,661.16. The U.K.'s FTSE 100 index put on 0.2% to 6,572.09.

COMEX December gold futures are down $8.7 at $ 1318.3 per ounce. The metal may break below $1300 with the US nonfarm payrolls data due later next week and the jobs and the housing data due this week.

MCX October bullion futures floundered below Rs 29700 down nearl29700 down nearly Rs 200 per 10 grams. The metal may see the levels around Rs 29500-200 levels in the near term with the strong resistance expected near Rs 30100-300 levels.