Weakness seemed to have stemmed in the market as bullion prices fell on Thursday following a recovery in the US dollar against the major currencies of the world.
Gold October contract of Comex fell below $1000 level and hit the session low of $990.70 per ounce before closing at $997.60 per ounce. Prices of silver December contract of Comex also lost its ground and slipped towards the lowest level of $16.18 per ounce on Thursday and settled at $16.24 per ounce for the day.
The US dollar staged a recovery against its European counterpart and other major currencies yesterday as US home sales figures pointed towards negative growth, which prompted investors to head for the greenback due to its safe haven image.
The US Fed, after leaving the lending rate unchanged, planning the exit strategy of the stimulus measures that was introduced earlier during the economic turmoil has led to the idea that inflation will be curbed, resulting in a decline in demand for the yellow metal. The fall in crude oil prices also contributed towards the fall in precious metals.
The holdings of SPDR, the largest gold backed exchange traded fund, is reported to have slid to 1094.107 tonnes as of yesterday, down from 0.7 percent. US durable goods and new home sales figures are scheduled for release later during the day.
Courtesy: JRG Wealth Management
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