Prices of gold futures turned away 2 weeks minimum in Wednesday s investors continued to monitor the moves of the US dollar, but analysts said that gold bullion is unlikely to increase dramatically ahead with dollar losses seen limited.
Gold for June delivery on the Comex Exchange rose by as much as 0.9% to a daily peak of 1,276.10 a troy ounce before giving back some gains to trade at $1,274.75.
Spot gold prices was up 0.6 percent at $1,273 an ounce, after touching a low of $1,257.25 on Tuesday, its weakest since April 28.
The US dollar index, which measures the strength of the greenback versus a trade-weighted basket of six major currencies, stopped his hitting streak six days in early trading on Wednesday drop to 93.99 after climbing to 94.33 a day earlier, it was the most since April 28.
The greenback falling below the 109 level against the yen as investors locked in profits after its steep climb after continuous comments about a possible intervention by the Japanese government.
The appetite for gold seemed to have diminished after the metal failed to break endurance level cogently $ 1300 last week. But that was up 20 percent for the year on the expectations of an increase in short-term interest rates in the US have vanished.
“In the future, we see limited upside for the price of gold given the limited room for the Fed to surprise on the downside, a limited dollar space depreciate, and little room for China to drive (emerging markets) fortress currency to contributing to weaker dollar, “said Goldman Sachs in a report.
Still, Goldman increased its gold price forecasts for the next months, citing strong net speculative positioning and a weaker US dollar recently. The bank raised its outlook for price of three, six and 12 months for gold at $ 1,200, $ 1,180 and $ 1,150, from $ 1,100 $ 1,050 and $ 1,000 per ounce before.
Gold and silver continued to shine from the start of trading today. With a gain of 0.75 per cent on MCX gold is trading at Rs 30,000. About 2 per cent increase silver is trading above Rs 41600. The foreign markets and rupee support to the domestic gold prices.
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