Gold Drowns Further; Dollar Appreciates

Gold.....

Gold futures drowned further in the early European trades today as the dollar held largely steady ahead of a raft of data that could offer further evidence on whether an economic recovery remains under way in the U.S. The 12% rise in the gold demand in the first quarter of 2013 also failed to boost the prices.
The ICE dollar index, which measures the greenback’s movement against six other major currencies, was at 83.799 versus 83.795 on Wednesday. The greenback rose to around ¥102.25, but then lost grip of the slight gain by softening to ¥102.15. The dollar late Wednesday traded at ¥102.23.
The dollar briefly climbed against the Japanese yen after Japan said stronger household consumption and exports helped the economy grow 0.9% in the first quarter, surpassing expectations.
Quarterly gross domestic product figures from France, Germany and the euro zone that fell short of expectations had supported broad gains for the dollar on Wednesday. The euro exchanged for $1.2871 on Thursday, down from $1.2880 Wednesday, when the euro hit a six-week low against the greenback.
Later Thursday, a raft of data from the U.S. will be under assessment. That includes weekly figures on jobless claims, as the Federal Reserve has listed improvement in the labor market as a key factor in deciding when it will start tapering down bond purchases aimed at stimulating growth.
A snapshot of activity in the manufacturing sector, which has been sluggish lately, is also expected from the Philadelphia Federal Reserve. Also due are reports on consumer prices and new-home construction in April.
The latest World Gold Council Gold Demand Trends report, which reports on the period January-March 2013, shows a market driven by diverse global demand, and an appetite for owning gold jewellery that continues to grow. However, overall demand for gold slowed in Q1 of 2013. First quarter gold demand of 963 tonnes (t) was down 13% compared with Q1 2012 and the value measure of gold demand in Q1 2013 was US$51bn, down 16% on the year before.
Total jewellery demand was up 12% year-on-year in Q1 2013, driven in the main by Asian markets. Jewellery demand in China was up 19% on the same period last year and stood at a record 185 tonnes(t). Demand in both India and the Middle East was up 15% respectively and in the US, demand showed a significant increase, 6%, for the first time since 2005. Demand for gold in China and India was also driven by an increase in bar and coin sales - up 22% year-on-year in China and 52% in India. In the US demand for bars and coins was up 43% compared with the same quarter in 2012.
Source by Commodity Insights