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Friday, January 30, 2009

Gold Sparking Even After Dollar Strength

Moves Nearer To All Time Highs In Domestic Futures Market

Gold is again enlightened for a second straight day. Both MCX and COMEX saw smart recovery last night and have continued their bull run. COMEX Gold was trading at $ 925.30 an ounce, up $18.80 when last seen.

MCX Gold April expiry opened in green and spooked higher. The contract is at Rs 14198 per 10 grams up Rs 89. the prices are near to thier all time highs of Rs 14450 registered on 10th October 2008.
The surprising part of this rally in domestic and international markets is the fact that Dollar has shown constant up gradation against Euro and other major currencies. Dollar is now trading at 1.2853 up 104 pips. Dollar was at 1.2953 at the time of close on Thursday.

Weakening the EURO was further bad report from the Eurozone. The Eurozone jobless rate rose to 8% in December from an upwardly revised 7.9% in November, the Eurostat said Friday. The statistical office revised the rate for November from 7.8%. Economists had expected a rate of 7.9% for the month of December.

The gold price is likely to hit record highs in dollar terms as fears grow about the stability of the US currency, the chairman of Barrick Gold said last night at the World Economic Forum (WEF) in Davos.

The founder of the world's largest goldmining company said that there was even a possibility that central banks, including China's, might start to switch from dollar holdings to gold, which could cause the price of the metal to treble.

Yesterday, the U.S. Census Bureau said that new home sales were at an annual rate of 331,000 units in December, down 14.7% from November's pace and weaker than expected. For all of 2008, there were 482,000 new homes sold, down 38% from 2007.

The U.S. Labor Department said that jobless claims were up 3,000 last week to 588,000, more than expected. The U.S. Commerce Department said that durable goods orders were down 2.6% in December, weaker than expected. For all of 2008, orders were down 5.7%, the second largest decline on record.

source: Capital Market
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