Prices of gold futures reached a fresh 2-week high on Wednesday as better than expected US data support the greenback strengthened after earlier losses amidst growing expectations of higher interest rates in the US this year.
On the Comex, gold futures for August delivery hit an intraday low of $1,184.10 a troy ounce. While, Gold for immediate delivery was little changed at $1,186.31 in London.
Bullion futures were little changed after falling 1.4% on Tuesday on rising new home sales and consumer trust. The gold trading volume was twice the average of 100 days of the time of day, data compiled by Bloomberg. The dollar spot rate was also stable on Wednesday after hitting a one-month high.
The euro erased gains versus the dollar, falling to a one month, while the dollar rose to up to an eight year high against the yen, as the demand for the US dollar continued to be propped up by expectations of a rate hike US in the near future.
The local currency rupee violated the 64 per dollar to close weaker against the dollar on Wednesday as traders had purchased dollars noting its strength against Asian currencies and expected outputs of the foreign institutional investors (FII) due the weakness of the local stock exchange, and hit a low of 64.16, a level last seen on May 13.
The strength in the dollar, pressure on gold market. After slipping down to Rs 27,000 in the domestic market yesterday, as the rupee weakened slightly on today, gold slightly gained. Currently, with a gain of 0.2 percent on MCX gold is trading around Rs 27,000.
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