Impressive turnaround in domestic markets as Rs 13k makes its presence felt vividly
Gold recouped some of its intense losses in the mid London trades today as the benign movement in the global equities markets. The commodity, reeling off in tandem with the stronger greenback and a slide in the oil futures, recovered from a low of $ 823.60 per ounce for the February contract on the COMEX. The rebound has come at a crucial time as an extension of the current weakness would have once again pushed the metal lower directly near $800 per ounce mark - the levels which supported the futures last week
The movement in the yellow metal is still underpinning calls for the commodity being in for a massive upturn as traders are discounting the yellow metal to rise either way the global economic downturn shapes up. If there is indeed a prolonged spell of shrinking economic activity and the financial markets fail to rebound substantially from the present levels, the yellow metal would gain, as it has done on most of the occasion in the last one year. Regular buying emerged in the yellow metal once it fell of a life time high of $1032 per ounce in March last year. In case of a rebound in the equities, there is absolutely no doubt about the fact that such a recovery will bring along with it an unprecedented surge in global inflation. All of the new money that the US Fed and other central banks have pumped into the economy will make itself felt then.
Meanwhile, as the COMEX futures recouped their losses and hovered around $830 per ounce amid cautious sort of sentiments, the domestic futures also managed to recover from the watershed Rs 13k. The MCX February futures bounced off a low of Rs 13001 per 10 grams, marking the preciseness of the level. The contract currently trades at Rs 13355, up Rs 258 or nearly 2% from the previous close with 20% increase in the open interest.
source: Capital Market
