Gold Pulls Down; World Bank Cuts Growth

Gold futures pulled down in the Asia electronic session today however the losses were limited due to weakness in the US dollar. The Asia equities tumbled sharply today after the World Bank lowered its global economic-growth forecast.

In its semiannual Global Economic Prospects report the World Bank revised lower its expectations for growth in China, Brazil and India, while upping estimates for Japan and the U.S. For 2014, the World Bank sees global growth at 3%. The World Bank lowered its global economic-growth forecast Wednesday, tipping 2.2% expansion in 2013, down from a 2.4% projection issued in January and below last year’s estimated 2.3% growth.

Meanwhile, Australia’s May employment data surprised markets with a gain in jobs, sending the nation’s currency jumping. Total employment rose by 1,100 last month, with the jobless rate holding steady at 5.5%, the Australian Bureau of Statistics said Thursday. On the other hand, the gains came on the back of a 6,400 rise in part-time jobs, with full-time positions falling 5,300.

Gold for August delivery is trading down $ 2.9 at $ 1389.1 per ounce on the New York Mercantile Exchange. Yesterday, it rose $15, or 1.1%, to end at $1,392 an ounce in floor trade, after earlier dipping to an intraday low of $1,372.20.

Gold prices have suffered on expectations the Fed will move in coming months to scale back its bond buys. MCX Gold had rallied sharply in recent years as the Fed and other major central banks embarked on aggressive monetary-easing programs.

Gold lost $9 on Tuesday as commodities and other assets were rattled by the Bank of Japan’s decision to stand pat on monetary policy. Gold futures have dropped more than 17% so far this year.

MCX August gold may open today’s session near Rs 27850 per 10 grams and may find support near Rs 27700 levels.


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