Gold, silver may begin week on good note
Mumbai, June 4
Gold futures closed higher on Friday leading an advance across the metals pits. Gold for August delivery closed up $7.50 at $641 an ounce on the New York Mercantile Exchange, reported the Commodity Research Group.
The contract was recovering from a six-week low it hit on Thursday, that marked a third consecutive session of declines, as traders continued to lock in recent gains. Just for a memory recap, the research said the Midas Metal was down 2.5 per cent from its closing level at $657.40 an ounce a week ago. In India, gold closed at Rs 9,633 per ten grams, while silver made a close at 18,682 per kilo, said the research group.
According to the research group, gold’s gain was primarily in response to a falling dollar.
The dollar tumbled after the US labour department said that the economy added just 75,000 jobs in May, less than half expected by the economists.
Financial markets reacted sharply on renewed speculation that the Federal Reserve may pause in its steady campaign of rate increases, with the dollar hitting hard.
The weak jobs data spurred buyers of the yellow metal back into the game. Besides, investors were in realisation that the idea of a Fed pause now seems very likely and thus, gold may find renewed interest, specially since the Iran issue is just not showing any signs of cooling down, says the research group.
Further, Iranian President Mahmoud Ahmadinejad said Iran will not give up its right to create nuclear energy because of Western pressure.
Earlier, gold found support from reported comments by a Chinese central bank board member, who said the country should use its foreign-currency reserves — the world’s biggest — to buy gold and oil as a hedge against further weakness in the dollar.
Small reactions apart, the primary trend is up and up. Gold is down $29.20 on a month-to-month basis or 4.38 per cent, but it is up +$214.50 or +50.79 per cent on year-to-year basis.
The noble metal and silver both are likely to begin the new week on a cheerful note, reports Commodity Research. |
