Gold gains limited, as dollar strengthens on progressing US economy

Gold gains limited, as dollar strengthens on progressing US economy

Gold futures edge rose on Friday, but gains were expected to remain limited by a stronger US dollar, after signs of a further boost in the US economy tightened the prospects for rising interest rates.

On the Comex, gold futures for August delivery were up 0.19% at $1,182.60. While, Spot gold was down 0.2 per cent at $1,179.60 an ounce.

The stronger dollar, 0.7 percent against a basket of major currencies, weighed on gold by making it more expensive for those holding other currencies.

Thursday’s data have shown that retail sales jumped by 1.2% last month, beating expectations for a gain of 1.1%. Retail sales rose by 0.2% in April, whose figure was revised up from a previously reported flat reading. Also adding to recent upbeat jobs data which suggested that the economy was picking up momentum After a sluggish start this year.

A reaffirming economy would likely lead the Fed to raise interest rates in September, which would further increase the dollar, in turn dents bullion demand without interest paid.

However Bullion is headed for its first weekly gain in four, taking advantage of the achievements of earlier in the week, when the dollar was weaker and concerns raised under the Greek crisis.

The International Monetary Fund (IMF) on Thursday said that his delegation had given up the talks and flown home because of the large differences with Athens.

“My guess is that Europe can manage better than it should in 2010, when gold fell on the back of the evolution of the Greek debt crisis and fears of spreading it to other countries in the periphery a Greek default,” Analysts said.

Tracking a firm global trend Gold futures prices on MCX were trading flat on Friday. MCX Gold futures for October delivery was trading at Rs 27,124 up Rs11, or 0.04 percent.

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