Gold for August delivery gave up $6.6 to $1,405 an ounce in electronic trade on the Comex division of the New York Mercantile Exchange. It rose $18.90, or 1.4%, to settle at $1,411.90 an ounce on Monday.
The prices reclaimed the $1,400-an-ounce level, helped by a decline in the U.S. dollar on data showing a contraction in U.S. manufacturing in May. Dollar-denominated commodities tend to benefit from a weaker greenback as it makes them less expensive for holders of other currencies.
Monday’s weak manufacturing report from the Institute of Supply Management curbed concerns that the U.S. Federal Reserve is preparing sooner than later to taper its bond-buying program, which has been supportive for gold.
The markets will further assess the Fed’s quantitative easing program — aimed at stimulating economic growth — when the widely watched U.S. employment report for May is released on Friday.
The U.S. dollar rose against most major rivals, the ICE dollar index is trading at 82.759, higher than Monday’s level of around 82.687.
MCX August gold futures are trading down more than Rs 50 at Rs 27276 per 10 grams. The traders may short it with the target of Rs 27230 and Rs 27170 levels with stop loss around Rs 27320 levels.
Source by Commodity Insights
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