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Gold Jumps Back As Dollar Slips

Capital Market/ 09:41 , Aug 08, 2013

Gold futures jumped back near $1300 an ounce in the Asia electronic session today helped by the broad fall in the US dollar.

The dollar fell across the board Wednesday, hitting its lowest level against the yen since mid-June ahead of a central bank decision in Japan. The dollar fell to ¥96.36 from ¥97.71 late the prior day.

Gold for December delivery extended yesterday’s gains trading up $7.5 at $ 1293 an ounce on the New York Mercantile Exchange. Yesterday it added $2.80, or 0.2%, to settle at $1,285.30 an ounce.

Cleveland Fed President Sandra Pianalto said the central bank could begin to slow its monthly asset purchases if the labor market continues to improve, without giving hints about timing. Investors have been watching for clues on when the Fed could begin to slow its monthly asset purchases of $85 billion, especially since its latest monetary-policy statement made no mention of a timeline.

On the data front today, China reported much better than expected trade results for July on Thursday, marking a sharp recovery from the previous month. Reported Chinese trade data showed exports rising 5.1%, swinging from June's 3.1% fall. Imports, which had dropped 0.7% in June, showed a 10.9% leap for July. The resulting trade surplus narrowed to $17.8 billion, down from June's $27.13 billion.

South Korea's central bank, kept its benchmark interest rate steady at 2.50% for the third straight month Thursday amid uncertainty over the timing of a rollback in the U.S. Federal Reserve's stimulus program.

The Bank of Japan kept its policy unchanged Thursday following its meeting, while maintaining language from the previous month that the economy "is starting to recover moderately. The yen tipped higher after the announcement, with the dollar slipping to ¥96.50, compared to ¥96.69 prior to the decision.

MCX October gold futures may open today’s session near Rs 27700 levels with resistance near Rs 27800-820 levels.

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