Prices of gold futures were little changed on Friday as pressured by renewed expectations of a rate increase in the US this year despite the recent softer economic data.
Gold futures prices were back to levels where they were prior to the release of much softer than expected jobs data from the United States last week. That gold rose to a seven-week high above $1,220 on Monday as investors cut back estimates for a rate increase by Fed after the number of posts depressing jobs data.
The non-interest-bearing metal was hit by reviews in Federal Reserve officials suggesting that a rate hike in June could still be at stake, along with the minutes of the March meeting of the Fed, which opened the door to an increase in that month.
On comex, gold futures for June delivery were steady at $1,194.20. While, Spot gold was little changed at $1,194.71 an ounce.
A Fed governor Jerome Powell said it would be willing to start tightening policy despite the present low inflation rates, adding that the Fed could act in June if economic data over the next two months showed that the recovery continued on track.
Local currency was weak against the US dollar as state-owned banks continued to buy the US currency, likely on behalf of the RBI. The dollar index, which measures the US currency’s strength against major currencies, was trading at 99.564, up 0.41%.
At the Multi Commodity Exchange, gold futures delivery in August moved marginally up by Rs 72, or 0.27%, to Rs 26,750 per 10 grams amid positive cues from overseas markets.
The prices of gold would fall to five-year lows this year, extending two years of decline before rebounding in 2016 on a demand recovery in Asia, analysts at Thomson Reuters GFMS said.
The golden demand in top consumer the India risks falling for the second consecutive year in 2015, as millions of Indian farmers affected by erratic weather and falling prices of raw materials cut purchases.
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