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Thursday, February 26, 2009

Gold drops as recent momentum fades away

Yellow metal still above 15000 on MCX but profit selling continues

Gold slipped sharply yet again as a dismal week continued for the commodity as the momentum generated by the prices around $1000 mark was seemingly fading away. Despite much of negatives on the usual suspects side i.e. US dollar and crude oil and plenty of positives on the physical demand-supply side, with total gold production in South Africa falling by a significant 13.6 percent to 220 127 kilograms in 2008 - the lowest level of production since the 218 031 kilograms produced in 1922, the yellow metal failed to take a lift.

COMEX Gold slumped to a low of $937 per ounce and currently trades at $940.60, down $25.60 per ounce. MCX Gold futures are still finding a very good support around Rs 15200 levels. The April Gold trades at s 15237, down Rs 276 per 10 grams or 1.80% from the previous close. The open interest is down 3.70% so far, indicating persistent profit selling.
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