London: Gold tumbled to a two-month low below the key $900-an-ounce level on Tuesday as the dollar's rise against the euro dampened the metal's appeal as an alternative investment and triggered bullion selling.
Falling oil prices also put pressure on gold, which is traditionally seen as a hedge against inflation. Other metals suffered losses, with silver slipping five per cent to a two-month low and platinum falling more about six per cent.
Gold hit a low of $884.70 and was at $887.40/$888.20 an ounce at 1411 GMT, against $916.20/$917.00 late in New York on Monday, when it fell two per cent. The metal has fallen about 14 per cent since hitting a record high of $1,030.80 two weeks ago.
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"Given the elevated level of speculative interest, we would not rule out a deepening of the current correction in prices," said Suki Cooper, precious metals analyst at Barclays Capital.
Environment
"However, the overall environment for gold remains positive over the forthcoming months," she said, adding the dollar was not expected to rise markedly against the euro in the short term, given the likelihood of poor US data this week.
The dollar rose after Swiss bank UBS announced an additional $19 billion of writedowns and Deutsche Bank said it expected to write down a more than the forecasted $4 billion in the first quarter, showing that credit problems were not limited to the United States alone.
Weaker oil prices also dragged down precious metals. Oil fell to near $100 a barrel, extending losses from the previous session.
In other markets, US gold futures for June delivery on the Comex division of the New York Mercantile Exchange fell $29.9 an ounce to $891.60.
"Given gold's recent movements, the yellow metal will remain vulnerable to selling pressure in the coming sessions, particularly as the second quarter is traditionally weaker than the first due to general market cycles," James Moore, analyst at TheBullionDesk.com, said in a market report.
Tuesday, April 1, 2008
Gold, platinum follow oil on southward journey
Gold and platinum followed oil and other commodities on a journey towards south on the last day of the previous fiscal year.
Gold and other precious metals futures finished weaker on Monday in reaction to slipping prices for crude oil and other commodities. Long liquidations at the end of the quarter, as traders hunted down profits with which to close their books, also dampened prices.
June gold fell $US15 to finish at $US921.50 a troy ounce on the Comex division of the New York Mercantile Exchange. May silver slid US63 cents to $US17.31.
The euro was not able to extend early gains, and weakness in crude oil during the latter stages of the session helped pull down gold and silver, analysts said.
In other metals trading, July platinum fell $US5.40 to $US2043.40 an ounce, June palladium declined $US4.70 to $US450.20 an ounce, and the most active May copper contract fell 0.05 cent to settle at $US3.8310 a pound.
Gold and other precious metals futures finished weaker on Monday in reaction to slipping prices for crude oil and other commodities. Long liquidations at the end of the quarter, as traders hunted down profits with which to close their books, also dampened prices.
June gold fell $US15 to finish at $US921.50 a troy ounce on the Comex division of the New York Mercantile Exchange. May silver slid US63 cents to $US17.31.
The euro was not able to extend early gains, and weakness in crude oil during the latter stages of the session helped pull down gold and silver, analysts said.
In other metals trading, July platinum fell $US5.40 to $US2043.40 an ounce, June palladium declined $US4.70 to $US450.20 an ounce, and the most active May copper contract fell 0.05 cent to settle at $US3.8310 a pound.
Dubai to host Gold Conference
DUBAI: Dubai, the Asian hub for major trading in gold, is gearing up to host sixth annual Dubai City of Gold Conference. The conference will take place between April 12th and 13th at the Park Hyatt, Dubai.
Over 500 delegates will be in attendance as they plan to discuss the current state of the industry and ways to face the challenge of price rises in the sector.
Transguard Security Services, ABN Amro Bank and Standard Bank are some of the sponsors of the event.
Tawfique Abdullah, chairman of the Dubai Gold and Jewellery Group, said: "The conference is an important event as it discusses ways to boost the growth of the global jewellery industry which is valued at around $146 billion (£73.18 billion)."
According to the official website of the Dubai Gold and Jewellery Group, the organisation was founded in 1996 and now has over 700 members. Its aim is to promote the gold and jewellery industry both nationally and internationally through its various activities.
Over 500 delegates will be in attendance as they plan to discuss the current state of the industry and ways to face the challenge of price rises in the sector.
Transguard Security Services, ABN Amro Bank and Standard Bank are some of the sponsors of the event.
Tawfique Abdullah, chairman of the Dubai Gold and Jewellery Group, said: "The conference is an important event as it discusses ways to boost the growth of the global jewellery industry which is valued at around $146 billion (£73.18 billion)."
According to the official website of the Dubai Gold and Jewellery Group, the organisation was founded in 1996 and now has over 700 members. Its aim is to promote the gold and jewellery industry both nationally and internationally through its various activities.
Gold, silver, platinum decline on profit booking
NEW YORK: Gold futures along with silver and platinum declined on profit booking in early trade Monday as US inflation showed signs of relaxing and the dollar remained steady.
June gold slid $US17.50 to settle at $US936.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
May silver shed US61 cents to settle at $US17.94 an ounce.
July platinum fell $US9.80 to finish at $US2048.80 an ounce, the most-active May copper contract fell US4.15c to settle at $US3.8315 a pound, but June palladium ended $US1.10 higher at $US454.90 an ounce.
June gold slid $US17.50 to settle at $US936.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
May silver shed US61 cents to settle at $US17.94 an ounce.
July platinum fell $US9.80 to finish at $US2048.80 an ounce, the most-active May copper contract fell US4.15c to settle at $US3.8315 a pound, but June palladium ended $US1.10 higher at $US454.90 an ounce.
Will dollar go down even more?
A prudent investor might very well decide to keep his powder dry until the next big investment trend reveals itself.
But thus the big question – what kind of powder to keep?
An investor needs a baseline. He needs to be able to figure out whether he is making progress or backsliding. An American typically keeps score in US Dollars. But there's the rub...
The Dollar is a baseline that keeps moving.
When the Euro came out in 1998, it quickly fell against the Dollar – down from $1.12 to just 88 cents. Of course, that was the era when the Nasdaq was flying and Americans were still the world's most admired people.
Since then, the tech stocks have crashed...the information age has proved a disappointment...the War against Iraq didn't go as planned...housing has gone up – and now down...and Wall Street has shown itself to be as incompetent as the rest of us.
(We all knew Washington was incompetent already.)
And now, as if to underline the point: Europe's esperanto money has risen to $1.55. In terms of what a Dollar will buy in the United States, a Dollar is down around 25% so far this century. In terms of what it will buy in Europe, it is down by about 50%. In terms of Gold, it has shrunk 75%.
So where should an American keep his money? This was a much easier question when the Gold Price was under $500 and the Dollar was worth more than the Euro. Of the three, the Dollar was the last place you wanted to be.
But now the buck is already down. Will it go down even more? Or is it time for A Dollar Rally? Now we're not only uncertain...we're unsure too.
It is still early in the credit crunch. If it crunches hard enough, the Dollar will pop up...squeezed out like a pea from a peapod. On the other hand, there will probably come a time when the Feds bring out the helicopters and begin throwing dollars out of the cargo hatch.
Then, like Germany in the 1920s... Argentina in the '80s...or Zimbabwe today...we'll see some real inflation!
In the meantime, it's probably best to play it safe. Here's what we're doing with our own money: we're splitting our cash into three parts – and putting each third, equally, into Gold (which we expect to double again from here)...Swiss francs, (because we fear the Dollar could fall apart at any moment)...and the dollar itself (because you just never know).
But thus the big question – what kind of powder to keep?
An investor needs a baseline. He needs to be able to figure out whether he is making progress or backsliding. An American typically keeps score in US Dollars. But there's the rub...
The Dollar is a baseline that keeps moving.
When the Euro came out in 1998, it quickly fell against the Dollar – down from $1.12 to just 88 cents. Of course, that was the era when the Nasdaq was flying and Americans were still the world's most admired people.
Since then, the tech stocks have crashed...the information age has proved a disappointment...the War against Iraq didn't go as planned...housing has gone up – and now down...and Wall Street has shown itself to be as incompetent as the rest of us.
(We all knew Washington was incompetent already.)
And now, as if to underline the point: Europe's esperanto money has risen to $1.55. In terms of what a Dollar will buy in the United States, a Dollar is down around 25% so far this century. In terms of what it will buy in Europe, it is down by about 50%. In terms of Gold, it has shrunk 75%.
So where should an American keep his money? This was a much easier question when the Gold Price was under $500 and the Dollar was worth more than the Euro. Of the three, the Dollar was the last place you wanted to be.
But now the buck is already down. Will it go down even more? Or is it time for A Dollar Rally? Now we're not only uncertain...we're unsure too.
It is still early in the credit crunch. If it crunches hard enough, the Dollar will pop up...squeezed out like a pea from a peapod. On the other hand, there will probably come a time when the Feds bring out the helicopters and begin throwing dollars out of the cargo hatch.
Then, like Germany in the 1920s... Argentina in the '80s...or Zimbabwe today...we'll see some real inflation!
In the meantime, it's probably best to play it safe. Here's what we're doing with our own money: we're splitting our cash into three parts – and putting each third, equally, into Gold (which we expect to double again from here)...Swiss francs, (because we fear the Dollar could fall apart at any moment)...and the dollar itself (because you just never know).
Gold gains on weak dollar
NEW YORK: Gold futures ended strong Wednesday at the New York Mercantile Exchange as US dollar continued its southward journey against euro.
Gold also benefited from renewed jitters about the financial crisis, after The Wall Street Journal reported that a $19 billion deal to take Clear Channel Communications Inc.
The April contract gained $14.20, or 1.5%, to settle at $949.20 an ounce on the Nymex. The dollar index, which tracks the value of the greenback against a basket of major currencies, fell 0.5% to 71.726 from late trading.
The dollar came under renewed pressure, especially against the euro, after reports showing resilient business sentiment in the euro zone's two biggest economies.
News of a 1.7% drop in U.S. orders for durable goods in February, marking a second decline in a row, further pressured the U.S. currency. In addition, new homes also fell to a 13-year low in February.
Also on Nymex Wednesday, silver for May delivery ended up 3% at $18.38 an ounce. May copper futures climb 1.4% to $3.73 a pound.
Platinum for April rallied 1.3% to $2,012.60 an ounce. June palladium sat out the rally, closing 0.7% lower at $459.70 an ounce.
Gold also benefited from renewed jitters about the financial crisis, after The Wall Street Journal reported that a $19 billion deal to take Clear Channel Communications Inc.
The April contract gained $14.20, or 1.5%, to settle at $949.20 an ounce on the Nymex. The dollar index, which tracks the value of the greenback against a basket of major currencies, fell 0.5% to 71.726 from late trading.
The dollar came under renewed pressure, especially against the euro, after reports showing resilient business sentiment in the euro zone's two biggest economies.
News of a 1.7% drop in U.S. orders for durable goods in February, marking a second decline in a row, further pressured the U.S. currency. In addition, new homes also fell to a 13-year low in February.
Also on Nymex Wednesday, silver for May delivery ended up 3% at $18.38 an ounce. May copper futures climb 1.4% to $3.73 a pound.
Platinum for April rallied 1.3% to $2,012.60 an ounce. June palladium sat out the rally, closing 0.7% lower at $459.70 an ounce.
Gold follows global trends, rises in India
Gold prices rose to Rs 12,370 per 10 gram in the bullion market here on Wednesday, mostly on global trends and aggressive buying by stockists.
Silver too was boosted by Rs 500 to Rs 23,100 per kg as jewelers and industrial units remained aggressive buyers.
The yellow metal traded notably higher by 0.3 per cent to $941.95 an ounce, the highest since March 20.Gold rose the most in three weeks as a disappointing US consumer confidence report eroded the dollar's value and boosted the appeal of the gold.
Analysts said a steep rise in global markets mainly pushed up the prices even as the physical demand was negligible.
Standard gold and ornaments shot up by Rs 190 each to Rs 12,370 and Rs 12,220 per 10 gram respectively. Sovereign held unchanged at Rs 9,925 per piece of eight gram.
Silver ready spurted by Rs 500 to Rs 23,100 per kg and weekly-based delivery by Rs 690 t o Rs 23,250 per kg. Silver coins, on the other hand, remained unaltered at Rs 26,600 for buying and Rs 26,700 for selling of 100 pieces.
Silver too was boosted by Rs 500 to Rs 23,100 per kg as jewelers and industrial units remained aggressive buyers.
The yellow metal traded notably higher by 0.3 per cent to $941.95 an ounce, the highest since March 20.Gold rose the most in three weeks as a disappointing US consumer confidence report eroded the dollar's value and boosted the appeal of the gold.
Analysts said a steep rise in global markets mainly pushed up the prices even as the physical demand was negligible.
Standard gold and ornaments shot up by Rs 190 each to Rs 12,370 and Rs 12,220 per 10 gram respectively. Sovereign held unchanged at Rs 9,925 per piece of eight gram.
Silver ready spurted by Rs 500 to Rs 23,100 per kg and weekly-based delivery by Rs 690 t o Rs 23,250 per kg. Silver coins, on the other hand, remained unaltered at Rs 26,600 for buying and Rs 26,700 for selling of 100 pieces.
'Bull run in commodities market will continue'
Commodity prices have been on a spectacular upward journey across global markets, impacting precious metals, base metals, energy complex and agri-commodities alike.
Gold has been trading at record highs, touching a recent high of almost $1033 level, whereas crude touched a high of $110. Agri-commodities such as soybeans and soy oil have also been trading at record highs.
Generally, it has been seen that commodity prices are driven higher by surging demand throughout the world. But the irony is that the latest surge comes amid concerns about a weaker global economy. At present, commodities prices are rising because the U.S. interest rates are falling below the rate of inflation.
When real rates are negative, they provide an incentive for speculation in storable commodities. One of the biggest surprises of this year was how quickly the Federal Reserve lowered interest rates. These revisions in expectations of Fed policy coincided quite precisely with the boom in commodity prices over that period. Last week’s sell-off of commodities also coincided with the Fed’s decision to cut rates by 75 basis points—a big cut, no doubt, but not as much as the market had been expecting. Now, commodities are rebounding as expectations build for more cuts.
The value of US Dollar has been depreciating against major currencies such as Euro, Japanese Yen, the Chinese Yuan, Indian Rupee and British Pounds. This impacts the Balance of Payment (BOP), pushing it to negative zones, especially in developing and under developing countries. They are unable to export more goods and services due to appreciation of domestic currency. The continuous appreciation of Indian Rupees around 15% since beginning of the year 2006 due to strong domestic growth and rising income has helped drive an expansion of more import and less export of agricultural commodity.
Chinese demand is also seen as a factor in boosting commodity prices. Another major factor attributable to rising commodity prices is the sharp increase in crude prices which have increased by almost 100% over last couple of years and touched a high of almost $110 recently. As higher crude prices have an inflationary impact on global economy, it exerts an upward pressure on prices of other commodities. And finally, the other big reason for rising commodity prices is buying by funds that have started adding commodities to their portfolio.
High-income growth is one of the main factors that drive the higher consumption especially in developing and under-developing countries. Rising investment, surging demand and expanding trade prospects are the other key drivers of global economic growth. Due to these factors, economic growth is expected to remain strong in countries like China, India, Brazil and India.
The relative significance and growth potential of agricultural and industrial sector resources play decisive roles in the world of agri and industrial commodities trade. It enhances the demand of higher food and articles like luxury goods, house, and durable goods with the help of income growth. The consumption gradually increases accordingly.
As far as the Indian story is concerned, farm growth is expected around 2.6 per cent in FY08 compared with GDP growth of an estimated 8.8 per cent. After a lower growth in industrial production and below expectation performance of the infrastructure sectors, inflation data released on Friday showed that it had surged to a 59-week high, to come within touching distance of the 7 per cent mark, effectively dousing expectations of an interest rate cut by the Reserve Bank of India.
The spiralling inflationary tend, which was up nearly a full percentage point at 6.68 per cent during the latest reported week ended March 15, has given rise to speculation of a possible interest rate hike in the near future, despite signs of a slowdown in the economy.
The Indian Government’s measures to tame the rising commodity prices seem to have little impact, as prices of some of them such as chana, yellow peas, masoor, turmeric, refined soya oil and mustard oil have jumped more than 20 per cent in the last three months.
Other commodities such as sugar, wheat, maize and guarseed also followed the rising trend. Apart from the rising demand for the cooking medium, reduction in customs duties and freezing of the base prices for imports of all types of edible oils since July 2007 have tempted refiners and stockists to book for higher imports. After lying low during last year, sugar prices seem to have gathered pace. There is a good demand for sugar in the international markets, where prices are appreciating after a hiatus. India has emerged as a big exporter after it toppled Brazil to become the largest producer of sugar.
World commodity prices have been rising substantially over the past few years and are expected to continue in coming years as long as the demand supply mismatch continues.
The US economic scenario, global economic outlook, coupled with the economic growth of China and India, will continue to determine the future direction of commodity prices. The bull run currently being witnessed in commodities markets worldwide is expected to continue as the Asian economies occupy their rightful place in world economy.
Gold has been trading at record highs, touching a recent high of almost $1033 level, whereas crude touched a high of $110. Agri-commodities such as soybeans and soy oil have also been trading at record highs.
Generally, it has been seen that commodity prices are driven higher by surging demand throughout the world. But the irony is that the latest surge comes amid concerns about a weaker global economy. At present, commodities prices are rising because the U.S. interest rates are falling below the rate of inflation.
When real rates are negative, they provide an incentive for speculation in storable commodities. One of the biggest surprises of this year was how quickly the Federal Reserve lowered interest rates. These revisions in expectations of Fed policy coincided quite precisely with the boom in commodity prices over that period. Last week’s sell-off of commodities also coincided with the Fed’s decision to cut rates by 75 basis points—a big cut, no doubt, but not as much as the market had been expecting. Now, commodities are rebounding as expectations build for more cuts.
The value of US Dollar has been depreciating against major currencies such as Euro, Japanese Yen, the Chinese Yuan, Indian Rupee and British Pounds. This impacts the Balance of Payment (BOP), pushing it to negative zones, especially in developing and under developing countries. They are unable to export more goods and services due to appreciation of domestic currency. The continuous appreciation of Indian Rupees around 15% since beginning of the year 2006 due to strong domestic growth and rising income has helped drive an expansion of more import and less export of agricultural commodity.
Chinese demand is also seen as a factor in boosting commodity prices. Another major factor attributable to rising commodity prices is the sharp increase in crude prices which have increased by almost 100% over last couple of years and touched a high of almost $110 recently. As higher crude prices have an inflationary impact on global economy, it exerts an upward pressure on prices of other commodities. And finally, the other big reason for rising commodity prices is buying by funds that have started adding commodities to their portfolio.
High-income growth is one of the main factors that drive the higher consumption especially in developing and under-developing countries. Rising investment, surging demand and expanding trade prospects are the other key drivers of global economic growth. Due to these factors, economic growth is expected to remain strong in countries like China, India, Brazil and India.
The relative significance and growth potential of agricultural and industrial sector resources play decisive roles in the world of agri and industrial commodities trade. It enhances the demand of higher food and articles like luxury goods, house, and durable goods with the help of income growth. The consumption gradually increases accordingly.
As far as the Indian story is concerned, farm growth is expected around 2.6 per cent in FY08 compared with GDP growth of an estimated 8.8 per cent. After a lower growth in industrial production and below expectation performance of the infrastructure sectors, inflation data released on Friday showed that it had surged to a 59-week high, to come within touching distance of the 7 per cent mark, effectively dousing expectations of an interest rate cut by the Reserve Bank of India.
The spiralling inflationary tend, which was up nearly a full percentage point at 6.68 per cent during the latest reported week ended March 15, has given rise to speculation of a possible interest rate hike in the near future, despite signs of a slowdown in the economy.
The Indian Government’s measures to tame the rising commodity prices seem to have little impact, as prices of some of them such as chana, yellow peas, masoor, turmeric, refined soya oil and mustard oil have jumped more than 20 per cent in the last three months.
Other commodities such as sugar, wheat, maize and guarseed also followed the rising trend. Apart from the rising demand for the cooking medium, reduction in customs duties and freezing of the base prices for imports of all types of edible oils since July 2007 have tempted refiners and stockists to book for higher imports. After lying low during last year, sugar prices seem to have gathered pace. There is a good demand for sugar in the international markets, where prices are appreciating after a hiatus. India has emerged as a big exporter after it toppled Brazil to become the largest producer of sugar.
World commodity prices have been rising substantially over the past few years and are expected to continue in coming years as long as the demand supply mismatch continues.
The US economic scenario, global economic outlook, coupled with the economic growth of China and India, will continue to determine the future direction of commodity prices. The bull run currently being witnessed in commodities markets worldwide is expected to continue as the Asian economies occupy their rightful place in world economy.
Which is China's largest gold mine?
BEIJING: An organisation has named what is reported to be China's largest gold mine, People's Daily Online reported.
The Zijinshan gold mine has been labelled as such by the China Gold Association, which bases its decision on results taken from appraisals and site investigations, the news provider claimed, citing reports.
Experts tasked with deciding the largest mine in the country concluded that the Zijinshan site held the largest amount of available reserved of resources containing the precious metal, while also being the largest in terms of mining scale and production.
The mine also has future potential for sustainable development and benefits from support by the government. It was reported to have "strong capabilities" in relation to independent innovation, while harbouring the greatest economical benefit.
According to InfoMine, Zijinshan is located in Fujian and is classified as an active open-pit site.
The Zijinshan gold mine has been labelled as such by the China Gold Association, which bases its decision on results taken from appraisals and site investigations, the news provider claimed, citing reports.
Experts tasked with deciding the largest mine in the country concluded that the Zijinshan site held the largest amount of available reserved of resources containing the precious metal, while also being the largest in terms of mining scale and production.
The mine also has future potential for sustainable development and benefits from support by the government. It was reported to have "strong capabilities" in relation to independent innovation, while harbouring the greatest economical benefit.
According to InfoMine, Zijinshan is located in Fujian and is classified as an active open-pit site.
Poor man's Gold is on its way...
Is it possible to acquire silver before it touches at $30?. Like gold, silver is also climbing up to its pinnacle level. It is important to catch the commodity before it finds it highest momentum.
While gold stole all the headlines when it broke the $1,000 mark, few took notice seven days earlier when silver hit its highest price in 28 years. Silver's current spot price is $17.21 an ounce, but one analyst [a gold bug, nonetheless], believes "the poor man's gold" will break the $30 barrier this year.
James Turk, founder of GoldMoney, said in his annual forecast that the U.S. economy "will get much worse in 2008, making gold the premier asset of choice, but not the best performing precious metal. That honor will go to silver, which I expect will clear $30 in 2008."
...we believe silver will outpace gold in 2008. After all, even with gold's precipitous rise in 2007, silver has still achieved better returns over the life of the prevailing bull market in precious metals.
Further, we believe that gold's ascent is emotionally driven. And fear and loathing in the marketplace for U.S. dollars and equities are still driving prices higher. The subprime crisis was the spark, and the golden fire will rage on in the year ahead.
Over time, however, this emotion will once again give way to the fundamentals of supply and demand amidst a continuing backdrop of the ever-weakening dollar. And in this longer-term scenario, we again give the nod to silver...
While gold stole all the headlines when it broke the $1,000 mark, few took notice seven days earlier when silver hit its highest price in 28 years. Silver's current spot price is $17.21 an ounce, but one analyst [a gold bug, nonetheless], believes "the poor man's gold" will break the $30 barrier this year.
James Turk, founder of GoldMoney, said in his annual forecast that the U.S. economy "will get much worse in 2008, making gold the premier asset of choice, but not the best performing precious metal. That honor will go to silver, which I expect will clear $30 in 2008."
...we believe silver will outpace gold in 2008. After all, even with gold's precipitous rise in 2007, silver has still achieved better returns over the life of the prevailing bull market in precious metals.
Further, we believe that gold's ascent is emotionally driven. And fear and loathing in the marketplace for U.S. dollars and equities are still driving prices higher. The subprime crisis was the spark, and the golden fire will rage on in the year ahead.
Over time, however, this emotion will once again give way to the fundamentals of supply and demand amidst a continuing backdrop of the ever-weakening dollar. And in this longer-term scenario, we again give the nod to silver...
Dollar bounce back against euro
The dollar bounced back from earlier losses against Euro on Monday, after a short-lived sell-off early in the session. A stronger-than-expected surge in inflation in the euro zone muted the effects of a small bounce after the slightly better-than-expected Chicago Purchasing Managers Index.
The EU statistical agency Eurostat said the annual inflation rate in the euro zone hit a new record high of 3.5 percent in March against 3.3 percent in February. The higher-than-expected preliminary figure was far above the European Central Bank's comfort zone of just under 2 percent.
In economic data Monday, business activity in the Chicago region continued to contract in March, but the contraction was less severe than in February, according to a survey of corporate purchasing managers released Monday.
The Chicago Purchasing Managers' index was at 48.2% in March compared with 44.5% in February. Readings under 50% indicate overall business contraction.
Greenback was also helped by U.S. Treasury Secretary Henry Paulson releasing a 218-page proposal to overhaul US financial regulations.
The blueprint for regulatory reform was commissioned in June last year and calls for the U.S. Federal Reserve to expand its powers of oversight beyond the banking system.
Paulson suggested that the current regulatory regime is almost solely focused above ground at 'the tree level' when 'the real threat to market stability is below ground, at the root level where the health of financial firms is intertwined'.
The EU statistical agency Eurostat said the annual inflation rate in the euro zone hit a new record high of 3.5 percent in March against 3.3 percent in February. The higher-than-expected preliminary figure was far above the European Central Bank's comfort zone of just under 2 percent.
In economic data Monday, business activity in the Chicago region continued to contract in March, but the contraction was less severe than in February, according to a survey of corporate purchasing managers released Monday.
The Chicago Purchasing Managers' index was at 48.2% in March compared with 44.5% in February. Readings under 50% indicate overall business contraction.
Greenback was also helped by U.S. Treasury Secretary Henry Paulson releasing a 218-page proposal to overhaul US financial regulations.
The blueprint for regulatory reform was commissioned in June last year and calls for the U.S. Federal Reserve to expand its powers of oversight beyond the banking system.
Paulson suggested that the current regulatory regime is almost solely focused above ground at 'the tree level' when 'the real threat to market stability is below ground, at the root level where the health of financial firms is intertwined'.
Dollar extend gains
Dollar extended gains against the euro and closed at 1.5794 (1.5780) on Friday.
As per the US Commerce Department release on Friday, inflation moderated in February, with consumer prices rising just 0.1% for the month.
The greenback found some support in the report from US Labor Department released on Thursday, which revealed that initial claims for state unemployment benefits fell 9,000 to 366,000 in the week ended March 22. However the four-week average of initial claims rose 1,750 to 358,000.
Also continuing claims for benefits fell 5,000, to 2.85 million for the week ended March 15. The four-week average of continuing claims rose 25,250 to 2.82 million.
The US economy grew at 0.6 % annual rate in the fourth quarter according to the Commerce Department estimate made public on Thursday. This was as per expectations and consistent with the two previous estimates, but the slowest pace since 2002.
The US Commerce Department reported Wednesday that sales of new homes in the US fell to a 13-year low in February, dropping 1.3% to a seasonally adjusted annual rate of 590,000.
US consumer confidence index had fallen in March to 64.5 from a revised reading of 76.4 in February, according to a US Conference Board release on Tuesday.
But the report from National Association of Realtors released on Monday had shown that resale of homes rose 2.9% to a seasonally adjusted annualized rate of 5.03 million. The rise was above expectations, and the first in seven months.
The Federal Reserve had cut its benchmark interest rate by 75 basis points in its last meeting.
The Commerce Department had reported a drop in US housing starts in February by 0.6 percent to a 1.065 million unit annual rate, down from 1.071 million units in January.
Another release showed the total industrial output in US fell 0.5 percent in February, much steeper than the expected rate of 0.1 percent.
US homebuilders' confidence held steady in March. The National Association of Home Builders (NAHB) Housing Market Index for March remained unchanged at 20.
The US Commerce department reported a worse-than-expected 0.6 percent fall in the Retail Sales in February.
The Beige Book survey of the Fed reported softening or weakening in the pace of business activity in 8 of the 12 Fed regional districts; and subdued, slow or modest growth in others, confirming the slowdown in US economy since the start of the year.
Federal Reserve Chairman Ben Bernanke had given a grim assessment of the U.S. housing sector, adding to mounting fears of recession.
The Fed had lowered its 2008 growth forecast to 1.3 % - 2 %, from a forecast of 1.8 % - 2.5 % in November.
In a grave effort to prevent a global market meltdown in financial markets and a possible recession in the US economy, the Fed had lowered its lending rate by 75 basis points to 3.50% - a rare move between formal meetings of the central bank's policymakers in January; and again lowered the rate to 3 percent January 30th.
Medium Term Outlook
Expecting a short-term recovery in dollar if it sustains below 1.5725. Supports are 1.5909, 1.6148, 1.6420. Resistances are 1.555, 1.5380, 1.5220 and 1.5110. But if it trades above 1.5910, more weakness can be expected.
In spot, dollar closed at 1.5794 (1.5780) against the euro, after trading in the range 1.5839 – 1.5737.
Last day, DEUR June traded in the range 157.73 – 156.90 and closed at 157.47.
As per the US Commerce Department release on Friday, inflation moderated in February, with consumer prices rising just 0.1% for the month.
The greenback found some support in the report from US Labor Department released on Thursday, which revealed that initial claims for state unemployment benefits fell 9,000 to 366,000 in the week ended March 22. However the four-week average of initial claims rose 1,750 to 358,000.
Also continuing claims for benefits fell 5,000, to 2.85 million for the week ended March 15. The four-week average of continuing claims rose 25,250 to 2.82 million.
The US economy grew at 0.6 % annual rate in the fourth quarter according to the Commerce Department estimate made public on Thursday. This was as per expectations and consistent with the two previous estimates, but the slowest pace since 2002.
The US Commerce Department reported Wednesday that sales of new homes in the US fell to a 13-year low in February, dropping 1.3% to a seasonally adjusted annual rate of 590,000.
US consumer confidence index had fallen in March to 64.5 from a revised reading of 76.4 in February, according to a US Conference Board release on Tuesday.
But the report from National Association of Realtors released on Monday had shown that resale of homes rose 2.9% to a seasonally adjusted annualized rate of 5.03 million. The rise was above expectations, and the first in seven months.
The Federal Reserve had cut its benchmark interest rate by 75 basis points in its last meeting.
The Commerce Department had reported a drop in US housing starts in February by 0.6 percent to a 1.065 million unit annual rate, down from 1.071 million units in January.
Another release showed the total industrial output in US fell 0.5 percent in February, much steeper than the expected rate of 0.1 percent.
US homebuilders' confidence held steady in March. The National Association of Home Builders (NAHB) Housing Market Index for March remained unchanged at 20.
The US Commerce department reported a worse-than-expected 0.6 percent fall in the Retail Sales in February.
The Beige Book survey of the Fed reported softening or weakening in the pace of business activity in 8 of the 12 Fed regional districts; and subdued, slow or modest growth in others, confirming the slowdown in US economy since the start of the year.
Federal Reserve Chairman Ben Bernanke had given a grim assessment of the U.S. housing sector, adding to mounting fears of recession.
The Fed had lowered its 2008 growth forecast to 1.3 % - 2 %, from a forecast of 1.8 % - 2.5 % in November.
In a grave effort to prevent a global market meltdown in financial markets and a possible recession in the US economy, the Fed had lowered its lending rate by 75 basis points to 3.50% - a rare move between formal meetings of the central bank's policymakers in January; and again lowered the rate to 3 percent January 30th.
Medium Term Outlook
Expecting a short-term recovery in dollar if it sustains below 1.5725. Supports are 1.5909, 1.6148, 1.6420. Resistances are 1.555, 1.5380, 1.5220 and 1.5110. But if it trades above 1.5910, more weakness can be expected.
In spot, dollar closed at 1.5794 (1.5780) against the euro, after trading in the range 1.5839 – 1.5737.
Last day, DEUR June traded in the range 157.73 – 156.90 and closed at 157.47.
Gold nosedives to Rs 11,830 in India
MUMBAI: Gold prices nosedived to a six-week low level on Tuesday at the bullion market and ended at Rs 11,830 per 10 grams.
The precious yellow metal dropped by Rs 460 to 11,830 per 10 grams, a level last seen on February 19, as the precious metal traded below 900 dollar an ounce after the greenback strengthened against euro.
Heavy selling by stockists influenced by a weakening trend in global markets.
Fall in oil prices and a broad decline in commodities prices reduced the metal's appeal as hedge against inflation.
Marketmen said on emergence of panic selling in line with record plunged in the precious metals prices at overseas front mainly led to the fall in both gold and silver prices.
Gold fell by 20.18 dollar, or 2.2 per cent, to 896.70 dollar an ounce in London, the first drop since February 15. Silver also lost 44 cents to 16.795 dollar an ounce.
Standard gold and ornaments tumbled by Rs 460 each at Rs 11,830 and Rs 11,680 per 10 grams respectively. Sovereign too lost Rs 125 to Rs 9800 per piece of eight gram.
In a similar fashion, silver ready attracted heavy selling and nosedived by Rs 1,270 to Rs 22,230 per kg and weekly-based delivery by Rs 1,410 to Rs 21,700 per kg. Its coins traded lower by Rs 100 to Rs 26,500 for buying and Rs 26,600 for selling of 100 coins.
The precious yellow metal dropped by Rs 460 to 11,830 per 10 grams, a level last seen on February 19, as the precious metal traded below 900 dollar an ounce after the greenback strengthened against euro.
Heavy selling by stockists influenced by a weakening trend in global markets.
Fall in oil prices and a broad decline in commodities prices reduced the metal's appeal as hedge against inflation.
Marketmen said on emergence of panic selling in line with record plunged in the precious metals prices at overseas front mainly led to the fall in both gold and silver prices.
Gold fell by 20.18 dollar, or 2.2 per cent, to 896.70 dollar an ounce in London, the first drop since February 15. Silver also lost 44 cents to 16.795 dollar an ounce.
Standard gold and ornaments tumbled by Rs 460 each at Rs 11,830 and Rs 11,680 per 10 grams respectively. Sovereign too lost Rs 125 to Rs 9800 per piece of eight gram.
In a similar fashion, silver ready attracted heavy selling and nosedived by Rs 1,270 to Rs 22,230 per kg and weekly-based delivery by Rs 1,410 to Rs 21,700 per kg. Its coins traded lower by Rs 100 to Rs 26,500 for buying and Rs 26,600 for selling of 100 coins.
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