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Saturday, June 13, 2009

Gold collapses by nearly $20 as dollar gains ahead of G8

MCX august gold contract lost as much as Rs 113

Gold futures drowned nearly $20 as the dollar posted huge gains against all the major currency rivals ahead of the G8 meeting today. Oil futures also tumbled below $72 after the OPEC cut again its forecast for world oil consumption this year.

Finance ministers from the Group of Eight industrial nations meet Friday and Saturday in the southern Italian city of Lecce as they attempt to lay groundwork for the meeting of G8 heads of state at their summit scheduled for next month.

The dollar gained ground against its major counterparts Friday, ahead of a meeting of Group of Eight finance ministers that may see officials seek to outline potential exit strategies from their massive fiscal stimulus efforts. The single currency extended its retreat after April industrial production data showed a larger-than-expected 1.9% month-on-month drop and a record 21.6% decline compared to April 2008. The euro-zone data undercut ideas that the long-running drop in output had showed stronger signs of moderation in the beginning of the second quarter.

COMEX benchmark gold futures fell by as much as $ 18.2 at $ 943.8 per ounce.

Economic data slated for release includes the University of Michigan's gauge on consumer confidence for June as well as import prices for May.

MCX August gold contract lost as much as Rs 113 at Rs 14552 per 10 grams. It may find support around Rs 14525 and 14465 levels.
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