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Friday, January 16, 2009

Gold on a roll, recovers wonderfully ahead of weekends

Sliding output paced the yellow metal up $830 on COMEX in electronic trades

Gold rallied today, extending the yesterday's gains as $800 provided an extremely good support to the commodity. The prices recovered last night, eying a dismal output data from South Africa, the largest producer of the commodity yesterday.

The commodity, expected to act as a safe haven in times of economic stress has hold up well in last few weeks despite hurried spell of profit booking at elevated levels. Investors are seeking refuge in the yellow metal and with South Africa's gold production decreasing by 8.7 percent year-on-year in November 2008; the momentum has turned bullish in the near term.

South Africa has reported a total 6.1 percent drop in total mining production, mainly due to negative contributions from diamonds, coal and gold. Total mining production for the three months ended November 2008 decreased by 2.2 percent compared with the three months ended November 2007.

COMEX Gold rose to a high of $831.50 per ounce in the electronic trades and currently hovers at $828.50, up nearly 21 dollars from the previous close. MCX Gold futures for February are trading at Rs 12947, up Rs 160 or 1.25% with a 6% increase in the open interest. The prices had neared their watershed Rs 13k in the afternoon trades and a break above may see bulls getting active on the counter yet again.
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