Gold Continues To Tumble On Strong Dollar

Gold futures tumbled further in the early European session today as the US dollar continued to strengthen post the strong data releases from world’s largest economy.
European stock markets extended gains on Friday, keying off gains in Asia, where Japanese shares jumped after the U.S. dollar climbed above the 100-yen level. The Stoxx Europe 600 index rose 0.4% to 304.88, on track for closing at a 2013 high. FTSE 100 index gained 0.3% to 6,611.68, while France's CAC 40 index added 0.6% to 3,950.00. Germany's DAX 30 index gained 0.6% to 8,319.42.
Gold for June delivery declined $14, or 0.93%, to $1,454 an ounce during Europe electronic trading hours. Gold on Thursday fell $5.10, or 0.4%, extending losses after the U.S. Labor Department said weekly initial claims for unemployment benefits fell by 4,000 to 323,000, the lowest level in more than five years.
Last week, the Labor Department reported that the economy added 165,000 jobs in April, and that the unemployment rate slipped to 7.5% from 7.6%.
The Federal Reserve has indicated it’s likely to taper monetary stimulus depending on improvement in the labor market. The Fed’s quantitative-easing program has been a benefit for gold, as QE tends to pressure the dollar and can lead to inflation. Gold is often seen as an inflation hedge.
Following the jobless-claims data, the U.S. dollar climbed against major rivals. The greenback leapt above the 100-yen level for the first time since April 2009, and the Australian dollar fell near parity. The dollar extended gains against the yen on Friday, trading above the ¥101 level.
MCX June gold futures are trading down more than Rs 100 at Rs 27046 per 10 grams. It may find support near Rs 27000 and Rs 26940 levels.

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