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Gold down in India on rupee appreciation, up overseas

Gold price fell 0.28% in early Friday futures trade on the Multi Commodity Exchange (MCX) due to an appreciation in the Indian
rupee. The yellow metal for near month delivery on the MCX plunged to trade at Rs 31,823 per 10 grams.

In London spot market, however, gold gained $5.17 to $17,72.78 an oz early Friday. “MCX Gold may note some gains tracking cues from international exchange, however upside is limited. COMEX gold is still trading near $1,770/oz, holding on to sharp gains noted in last few days.

Supporting gold price is monetary easing measures taken by central banks in last few days. However weighing on price is retreat in euro against the US dollar and the pause in rallying commodity prices on back of demand concerns,” Prerana Desai, an analyst with Kotak Commodity Services Ltd, a city based commodity broking firm.

The rupee appreciated to trade at 53.69 level against the US dollar in mid-Friday trade as compared to 54.39 at the close of Thursday.

Gold hit a 6 ½ month high earlier this week as Bank of Japan joined the US Fed in announcing additional monetary easing to support its economy. ETF buying. However, the momentum failed to sustain as the euro retreated and commodities fell from their recent highs.

Gold holdings with SPDR ETF rose by 3.015 tonnes to 1,308.414 tonnes. This is the highest holding with the fund seen since Aug.2011
when gold price in dollar terms hit record high level.

The euro is traing marginally higher against the US dollar today after a 0.6% slide Thursday. Reuters/CRB commodities index fell 0.5% yesterday to 306.93 points marking its fourth consecutive fall. Commodities, in general gained sharply in last few days on measures taken by central banks across the globe. However, commodities have corrected since then amid demand concerns.

“Gold may continue to be affected by movement in US dollar and commodities. Focus will be on US and euro-zone economy. No major
economic data is due today and we could see some choppiness in the market ahead of the weekend,” Desai added.

Mixed economic data also put pressure on commodities. US jobless claims fell from 385000 to 382000 for the week ended Sept 15 as against
forecast of a reading of 375K. Leading indicators fell 0.1% as against forecast of a flat reading. On other hand, Philadelphia Fed index
improved to -1.9 as against forecast of -4.

Euro-zone economic data was also mixed. Euro manufacturing PMI stood at 46 in Sept as against forecast of 45.5; services PMI stood at 46 as against forecast of 47.5. France manufacturing PMI stood at 42.6 in Sept as against forecast of 46.4; services PMI stood at 46.1 as against forecast of 49.5; German manufacturing PMI stood at 47.3 as against forecast of 45.2; services PMI stood at 50.6 as against forecast of 48.5.

Market sentiments were also dented by Chinese manufacturing data which showed continued contraction in the sector. HSBC China PMI improved from 47.6 to 47.8 in Sept but was below the 50 level for the 11th consecutive month.

Gold rose along with platinum price in last few days as labour issues in South Africa halted operations at some major mines. Platinum price
however slumped amid reports that Lonmin workers reached a wage deal. However labour strike continues at Gold Fields KDC
west mine.