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Monday, January 19, 2009

Sideways session for COMEX Gold

Lack of movement sees yellow metal move in a range of 10 dollars in electronic moves

COMEX Gold traded in a very sideways manner today with the mild upturn in the equity markets acting as a deterrent for further gains after a spirited rally in the commodity last week. The frail mining output data from South Africa and dollar's weakness capped the downside in the commodity and the electronic session shaped up as a very steady sort of a session for the yellow metal so far.

Gold started the New Year on a mixed note and extended its decline from a three month high of $892 per ounce for the benchmark futures on the COEMX division of the New York Mercantile Exchange. The moderate gains in the commodity after an extremely poor non-farm payrolls report proved short lived and COMEX futures fell to a low of $801.50 per ounce on 15 January.

The US non-farm payrolls printed a loss of 524000 in December, close to previous estimates of 525,000. For the month of December, unemployment in the world's largest economy rose to a whopping 7.2 percent, the highest rate not seen since 1993. The rise stemmed from losses in every sector category including financial services and manufacturing. Ultimately, with all things considered, the figure adds to 2.6 million jobs that were lost in 2008, the most in 64 years.

However, the US dollar, surprisingly strengthened post record losses in the US unemployment figures and pressurized the dollar denominated assets. Gold was sent reeling back on the two effects of dollar strength and slide in crude oil.

It took a dismal gold mining output data from South Africa, the largest producer of the commodity to pull Gold up from its slump. South Africa's gold production decreased by 8.7 percent year-on-year in November 2008 and helped the commodity to end at $839.90 per ounce.

Today, the counter moved in a tiny range of $836.50 - 846.30 per ounce. A paltry range of Rs 100 in the domestic markets also showed that lack of trading interest kept the opportunities minimal in today's session. MCX Gold futures for February eased from a high of Rs 13175 per 10 grams and currently trade at Rs 13124, down Rs 43 or 0.33% from the previous close.

source: Capital Market
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