Gold Stays Low Even As Dollar Slips
Frankfurt (Oct 25) International gold futures are trading lower in the early Europe session today even as the US dollar continued to fall and the equity markets stayed weak. However, the domestic gold futures were trading higher buoyed by gold buying tender by the Tamil Nadu government.
European stock markets opened broadly lower on Friday with the investors awaiting the first estimate of U.K. third-quarter gross domestic product. The GDP number is scheduled for release at 9:30 a.m. in London, or 4:30 a.m. Eastern Time. Germany's DAX 30 index fell 0.3% to 8,951.84. France's CAC 40 index dropped 0.7% to 4,246.56, while the U.K.'s FTSE 100 index fell 0.1% to 6,706.37.
Comex December gold futures are trading down $5.8 at $ 1344.5 per ounce in the mid electronic session today. The gold traders are keeping watch on the U.S. data due out later Friday inclusing the September durable-goods orders, and the University of Michigan consumer sentiment index.
In the currencies today, the European currency extended its uphill march to $1.3822 from $1.3804 late Thursday in North America. The Japanese yen saw fresh gains, with the dollar dropping to ¥96.97 from ¥97.39. The move slapped the currency-sensitive Tokyo stock market, where the Nikkei Stock Average sat 2.1% lower in late trading.
The U.S. dollar extended its downward slide Friday on the back of a dovish policy outlook for the Federal Reserve, pushing the euro up further to its highest level since November 2011. The ICE dollar index— which gauges the U.S. unit against six other majors — fell to test the psychologically important 79 handle, quoted at 79.070, down from late Thursday’s 79.211.
MCX December gold futures are trading are trading up nearly Rs 50 at Rs 30593 per 10 grams. The metal has been supported by the domestic factors like the weak Indian Rupee and gold purchase by the government. The Indian rupee today snapped its two-day gains against the dollar losing 21 paise to 61.67.
The Tamil Nadu government issued a tender with an intention to buy 400 kg of gold for around Rs. 120 crore. Tamil Nadu's Social Welfare and Nutritious Meals Programme Directorate Wednesday issued a tender for purchase of 100,000 gold coins of 22 carat each weighing four grams through competitive bidding by manufacturers and dealers of the yellow metal.
The gold coins are to be given to the eligible poor beneficiaries of the government's five marriage assistance schemes. The last date for submission and the tender opening will be Nov 22, 2013. A pre-bid meeting will be held Oct 28.
