Gold falls as Draghi comments weigh on euro

Gold fell on Friday as comments from European Central Bank chief Mario Draghi reignited speculation that the bank will inject more monetary stimulus into the euro zone economy, driving the euro lower against the dollar.

Draghi said inflation expectations were dropping to levels he considered excessively low. Gold, which is priced in the dollar and tends to fall when the U.S. unit strengthens, surrendered early gains after his comments.

Spot gold was down 0.2 percent at $1,190.61 an ounce at 1018 GMT, off a session high of $1,198.60, while U.S. gold futures for April delivery were down 60 cents an ounce at $1,190.30.

“There is some physical demand underneath the market. Every time we go towards the $1,185-1,180, there seems to be a bit of bargain hunting,” MKS head of trading Afshin Nabavi said. “But gold can’t really get its head above $1,200.”

“Overall the dollar continues to be leading the way, therefore I have to say that despite the demand for physical, I would think that because of the weakness in the euro, we have a chance of testing the lows again.”

A rally in the dollar earlier this month knocked gold to a 4-1/2 year low at $1,131.85 an ounce.

Gold was on track for its third straight weekly gain on Friday, buoyed by short-covering and a pause in the dollar rally earlier this week, while traders also eyed central bank activity for cues.

Traders were also digesting news of central bank sales and purchases. Ukraine slashed its gold reserves by more than a third in October, data from the International Monetary Fund showed, as the near-bankrupt country reels from fighting a pro-Russian separatist movement in the east.

Russia raised its gold holdings for a seventh straight month in the same period.

In physical markets, buying in top consumer China remained steady with premiums ranging between $2 and $3, helping lend support to global prices.

reuters

Read More :

Updated: 21/11/2014 — 4:56 PM

The Author

Pramod Baviskar

Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. Working Since 2007 And Online Presence Since 2010. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up.

COPYRIGHT © 2017. Pramod Baviskar. Dalal street winners advisory and coaching services. FAQ | Disclaimer | Privacy Policy

This website is best viewed using Microsoft Internet Explorer 9 or higher, and/or latest version of Google Chrome and Mozila Firefox browsers.