Gold Rallies As Dollar Takes A Dip

Singapore (Nov 26)  Gold futures rallied in the mid electronic session today following a drop in the US dollar and weakness in the Asian stock market. Today the traders will closely watch for the release of a batch of U.S. economic reports, including data on home-prices, consumer confidence and building permits.

The U.S. dollar lost ground today, pulling away from gains notched after the U.S. and other major world powers struck an nuclear accord with Iran. The ICE dollar index, a measure of the greenback against six rivals, fell to 80.837 from 80.884 late Monday in North American trade.

The euro rose against the dollar, buying $1.3531 from $1.3518, and against the Swiss franc the greenback traded at 0.9107 franc, down from 0.9116 franc late Monday. Against the Japanese yen the dollar rose to ¥101.51 from ¥101.47, holding to levels not seen in six months.

Gold for February delivery jumped $12.5 at $1,254.1 an ounce on the Comex division of the New York Mercantile Exchange.

Yesterday, it fell to fresh four-and-a-half month low of $1226.4 an ounce as the safe-haven appeal of the precious metal was dampened on sharp drop in the Japanese Yen, rally in equities and also as Iran agreed to limit its nuclear program in exchange for sanctions relief.

On the economic frontage today, China's central bank governor said that Beijing is moving ahead with plans to liberalize domestic interest rates and reduce its intervention in the foreign exchange market, the state-run China Securities Journal's website reported.

In a speech at a financial forum, People's Bank of China Governor Zhou Xiaochuan repeated statements that the central bank is focusing on liberalizing deposit rates and wants to withdraw from routine intervention in the foreign exchange market.

MCX December gold futures are trading up more than Rs 100 at Rs 30291 per 10 grams. The metal has traded in the range of Rs 30245-30444 so far today.