Gold prices rebound in early Asia on physical demand prospects
Singapore (Mar 12) Gold staged a mild comeback in early Asia on Thursday as normal demand flows in China and India for physical gold were eyed after recent sharp dips.
Gold prices for April delivery on the Comex division of the New York Mercantile Exchange rebounded 0.35% to $1,154.50 a troy ounce in Asia.
Silver futures, meanwhile, for May delivery also rose by 0.83% to trade at 15.493 a troy ounce.
Copper delivery for May dropped0.16% to $2.605 a pound.
Gold future prices fell for the eighth consecutive day on Wednesday as prices neared a one-year low amid continuing fears of an interest-rate hike by the U.S. Federal Reserve.
Gold has been in free fall since last Friday when prices declined more than $30 an ounce, following stronger than expected U.S. employment data in the February jobs report. The creation of 295,000 new U.S. jobs, as well as a 5.5% unemployment rate has heightened concerns that the Fed could raise interest rates by June.
In turn, the U.S. dollar has soared as expectations of an increase of the Fed Funds Rate has coincided with the start of a EUR 60 billion quantitative easing program by the European Central Bank. The Federal Open Market Committee could remove references of "remaining patient" from its minutes when it meets next on Mar. 17-18. The removal typically indicates that an interest rate hike is imminent.
A strengthening dollar affects dollar-denominated commodities like gold by making it more expensive for holders of other currencies to purchase the metal.
On Wednesday, gold rose above $1,162 an ounce following the release of January-February industrial output, investment growth and retail sales in China. For February on a year-over-year basis, Chinese investment growth was up 15%, while industrial output rose by 7.8%. Retail sales, meanwhile, gained 11.7%.
China is the second-largest purchaser of the precious metal in the world.
Source: MoneyControl
