Thursday 20 November 2014

Gold Stays Weak On Strong Dollar

Gold remained weak on firm US dollar ahead of the US CPI data release. The metal is easing on ideas that support for Swiss referendum to require the country's central bank to hold 20% of its reserves in gold bullions is waning. 
The euro fell to session lows against the dollar on Thursday after data showed that euro zone private sector output slowed in November, clouding the outlook for fourth quarter growth. Euro quotes at $1.2530, down 0.19% on Thursday and the US dollar index quotes at 87.83, up 0.17%.

The pace of economic growth in the euro area slowed to a 16 month low in November, according to the Markit Euro zone PMI. The headline index, which measures business activity in the manufacturing and services economies, fell from 52.1 in October to 51.4, its lowest since July of last year. Manufacturing output growth picked up slightly to the highest for four months, but the rate of expansion remained only modest. Growth in the service sector meanwhile eased for a fourth successive month to the weakest since last December.
German private sector has grown at the slowest rate in 16 months in November as manufacturing stagnates and services lose momentum, a survey showed on Thursday, signaling a weak fourth quarter for Europe's largest economy.
The minutes of the US Federal Reserve's last policy meeting released Wednesday showed that the Fed decided not to alter its wording on the timing of any interest rate increases. Fed officials worried that a change could be misinterpreted by financial markets. Most economists predict that the Fed won't raise rates before June.

The COMEX Gold for the December delivery off the session low and quotes at $1,192.90 per ounce, down $1 and Silver December quotes at $16.258 per ounce, 0.036 on Thursday.

Local gold slipped on weak global cues and strength in the local currency. The MCX Gold December delivery quotes at Rs 26543, down Rs 168 and Silver December delivery quotes at Rs 36033, down Rs 339 per 1 kg. Indian rupee gained strength in the afternoon session with the Indian rupee quotes at Rs 61.938, down 0.29% in Thursday.

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