Gold futures stay flat in the Asia electronic session today with the dollar trading near a four-month low against the euro before the Federal Open Market Committee wraps up a two-day meeting today.
Yesterday, Germany's Federal Constitutional Court rejected pleas to block the ratification of Europe's EUR500 billion permanent rescue fund, clearing the way for Germany's president to ratify the ESM under certain conditions and allowing the European Central Bank's bond purchasing program to proceed.
However, the judges attached various conditions to the ESM, saying the country's liability to the fund must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
COMEX December gold futures are trading flat at $ 1733.8 per ounce. Meanwhile, markets continued to eye the outcome of the Fed's policy meeting on Thursday, amid fresh speculation that the U.S. central bank may announce a third round of bond purchases, or quantitative easing, to boost growth.
Market expectations of a QE3 announcement this week increased after last Friday's weaker-than-expected jobs report and following a speech from Fed Chief Ben Bernanke at Jackson Hole last month.
Past monetary stimulus rounds weakened the U.S. dollar, boosting the price of dollar-denominated commodities like gold.
The U.S. dollar took an additional hit after ratings agency Moody's warned Tuesday that it could downgrade the U.S's triple-A rating if budget negotiations for 2013 do not result in policy measures which will reduce the country's debt.
MCX October gold futures may open today's session near Rs 31900 with support around Rs 31840.
Powered by Commodity Insights