Gold prices fell for the second consecutive day to trade near a six-week low on Wednesday on signs of softening demand in China whilst on holiday and as equities rebounded on hopes Greece would set up a deal with its creditors. One speculation Greece will provide a confrontation with creditors to request a loan extension.
Spot gold eased as much as 0.3 percent to $1,206.48 an ounce and was at $1,206.65 at 11:23 a.m. in Singapore. It slumped to $1,203.30 on Tuesday, its lowest since January 6.
The markets in China will be closed from Wednesday to February 24th for the vacation of the Lunar New Year and the volume of spot contract benchmark Shanghai Gold Exchange fell to the lowest level in over a year on Tuesday. Greece is intended to request an extension of six months of its loan on Wednesday, a person familiar with the matter told reporters in Brussels, asking not to be identified. (Source: Bloomberg)
China’s purchases had been robust in the pre-holiday period, as gold is purchased as gifts. But it expects sales to diminish both during and after the holiday.
Traders were expecting minutes from the last monetary policy meeting of the Federal Reserve which will be published later in the day for clues as to when the US central bank may raise interest rates.
Gold for April delivery retreated 0.2 percent to $ 1,206.70 an ounce on the Comex in New York after the most active prices fell 1.5 percent late on Tuesday.
Gold had seen some recent support offers safe shelter driven because of uncertainty about the future of Greece in the Eurozone. But expectations that are finally reaching a compromise between Athens and international lenders this week deterred investors to enhance their exposure to bullion.
Asian equities continued a mild rebound on Wall Street to edge higher on Wednesday, While precaution provides on the talks later in the day limited gains continuing saga of Greek debt.
The Indian rupee tracking, mixed Asian market currencies weakened slightly against the dollar.
The consensus on speculation of Greece has seen pressure on gold. At yesterday’s trading, gold had slipped on the previous 15-month low. However, the fall in rupee is getting some support to domestic prices.
Currently, more than by 0.25 percent rose on MCX gold is trading above Rs 26,300.
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