Gold futures decline on profit taking, focus remains on Fed

Gold futures decline on profit taking, focus remains on Fed

Bullion market players taking profits on overnight gains with continued focus on the moment of a widely expected interest rate hike by the Fed this year. Image Source:

Prices of gold futures dropped in Asia earlier on Friday, market players taking profits on overnight gains with continued focus on the moment of a widely expected interest rate hike by the Fed this year. The dollar regained a little strength ahead over the next US financial reports.

On the Comex, gold futures for June delivery were down 0.40% at $1,220.30.

But the facts were overshadowed by a further report showed that producer price index United States dropped 0.4% last month and was 1.3% lower on a Y-O-Y basis, the biggest drop since 2010.

The weak inflation data reinforced expectations the Fed will keep their distance from interest rates until the economic recovery is on a stronger footing, sending the dollar lower.

On Thursday, the US Labor Department said the number of US workers filing new for unemployment benefits in the week ending May 9 fell 1000-264000, reaching just above the minimum of 15 years arrived two weeks ago, indicating the labor market recovery continues.

In Japan, the release of April CGPI showed a drop of 2.1% year on year, coinciding with the expectations and scoring the first decline in twenty-five months from -0.5% in March 2013 as the base effect of the tax increase April 2014 sales vanishes.

The Bank of Japan Governor Haruhiko Kuroda, is due to speak about monetary policy at a seminar held by the Yomiuri Shimbun in Tokyo from 12:40 to 13:40.

Late in the session, the consumer confidence survey for April is due. In March, the consumer sentiment index rose 0.8 points to a seasonally adjusted 41.7, marking the fourth straight increase and was the highest since 41.7 in December 2013.

Investors were looking for right now ahead to reports on US industrial output, manufacturing activity in the region and consumer sentiment in New York due to the end of the day, for more indications over the strength of the economy.

The dollar index, which measures the strength of the greenback against major world currencies, traded at 93.58, up 0.14% from its previous close of 93 457.

The currency opened at 63.48 per dollar and touched a 63.46, a level last seen on May 6, closing at 63.52 per dollar, up 0.22% from its previous close of 63 66.

Gold after touching the upper level of the last 3 months has now come under pressure. Also includes about 0.50 percent decline. However SPDR gold holding has at 4-month low. The MCX gold is showing drop by 0.50 per cent to Rs 27,295.

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