Print News: Gold Poised To Fall As Yen, Dollar Surge

Gold Poised To Fall As Yen, Dollar Surge

Capital Market / 12:58 , Jun 01, 2012

Gold futures seems to tumble further as the yen and the US dollar surged stoking risk aversion ahead of the nonfarm payrolls data. European stocks opened mixed on Friday, with traders cautious ahead of key U.S. nonfarm payroll data, and downbeat China factory data also weighing on the sentiments.

The dollar resumed its northward journey on Friday as weak economic data from China and Australia combined with euro-zone uncertainty to drain investor risk appetite ahead of the crucial U.S. non-farm payrolls data for May. The ICE dollar index, which measures the greenback's moves against a basket of six major global currencies, rose to 83.183 in Tokyo afternoon trading from 83.035 in North American trade late on Thursday.

The euro fell to $1.2358 from $1.2369 ahead of a slew of economic data later in the day, including the region's Purchasing Managers' Index figures for May. U.S. nonfarm payrolls data for May is also due later in the day.

The Japanese yen gave up some of its overnight strength, meanwhile, after Japanese Finance Minister Jun Azumi and Vice Finance Minister Takehiro Nakao both stepped up the government's verbal intervention against the currency's rise, warning that they will intervene “ in a decisive manner” if the unit's volatile moves persisted. The dollar was buying ¥78.452 in Tokyo mid-afternoon trade Friday, compared with ¥78.34 overnight in New York.

Among risk currencies, the Australian dollar lost ground amid rising expectations that the Reserve Bank of Australia might cut interest rates again next week, by 0.25% points to 3.5% amid the European debt crisis and weak Chinese growth indicators as well as sluggish local economic data.

COMEX August gold futures slipped $8 at $ 1556 an ounce in early Europe electronic session today. It may tumble below $1550 finding support near $1535 and $1520 levels. A break of $1500 might be very bearish for the metal.

MCX August gold futures are trading down nearly RS 230 at Rs 29211 per 10 grams. The traders may short it with target of Rs 29140, Rs 29070, Rs 28990 and Rs 28900 with stop loss of RS 29240.