Gold Slips Further As Dollar Holds On

Frankfurt (Oct 31)  Gold futures slipped further in the early Europe session today as the US dollar glued to gains following the Federal Reserve’s statement indicating it still has plans to roll back monetary stimulus.

The U.S. dollar rose against the euro, the British pound and the Japanese yen as the Fed statement showed that, while a reduction in the pace of monetary stimulus has been delayed, policy makers still plan for the eventual tapering of the central bank’s bond-buying program.

The euro extended losses after the Fed statement, buying $1.3708 compared with $1.3743 late Wednesday. However, dollar reversed course against the yen trading at ¥98.29, down from ¥98.66. The yen on an intraday basis Thursday saw slight gains against the greenback after the Bank of Japan kept its policy stance and asset-buying program unchanged

The ICE dollar index, which tracks the greenback against the shared currency and five other currencies, rose to 79.897 from 79.849. The Fed said it will keep purchasing $85 billion in bonds because economic recovery remains weak.

December bullion futures are trading down $14.1 at $ 1335.2 an ounce of gold on the Comex division of New York Mercantile Exchange. Yesterday, it rose $3.80, or 0.3%, to settle at $1,349.30 an ounce.

More economic data will arrive Thursday, with U.S. jobless claims for the week ended Oct. 26 and the Chicago PMI for the month of October.

MCX December gold contract is trading down Rs 250 at Rs 29908 per 10 grams. The metal hit the day’s low of Rs 29860 and is expected to find support near Rs 29800-750 levels.