Gold managed to hold just below $1000 per ounce mark though the commodity countered a heavy resistance on profit sales with one-year high levels providing good impetus to book the profits. COMEX Gold futures for April hit a high of $994 an ounce and slipped to $988.30 per ounce, down $6.70 an ounce from the previous close.
US dollar fell sharply in the European trades today, testing levels above 1.2800 against the Euro, after ending higher across the board Monday. The currency hovered around 1.2700 against the Euro in Asian, as risk aversion renewed needs of fly to safety. Asian Stocks tumbled in with Dow Jones Industrial Average losing almost a 2.2%, close to an 11-year low. Uncertainty about U.S. banks also boosted investor's fears, keeping the safe haven buying unabated for the greenback, as the short term treasury yields sunk.
Last week, ECB president Jean Claude Trichet warned that the euro zone's financial system is facing challenging times, as financial markets and the real economy are dragged in a downward spiral. Major concerns are emanating on the Central and Eastern (CEE) economies in the Euro region and even as Germany has announced that it stands ready to protect the eurozone if one of its member states found itself in such serious difficulty that it could not refinance its debt.
However, London trades saw a diverse picture with the dollar rally coming to an abrupt end and the Euro marched to a high of 1.2829 even without any fresh cues. The momentum again seemed to turn away as the US trading hours approached and markets eagerly awaited for Fed Chairman Ben Bernanke's testimony in front of Congress. On the economic front, data on tap include the December house price index from S&P/Case-Shiller and consumer confidence for February.
Meanwhile, yesterday, the White House seemingly backed away from talk that they may nationalize either Citigroup or Bank of America and instead hinted about investing more in Citigroup. The equities movement would hold the key for the yellow metal and in case the selling pressure on the broad market stays on, the metal should near $1000 yet again./
MCX Gold futures also slipped though a frail state of affairs in the Indian rupee kept the losses somewhat limited. The Apr 09 contract hovers at Rs 15808, after trading as low as Rs 15750 per 10 grams. The contract trades down Rs 80.00 or 0.50 or percent with 0.37 percent drop in the open interest, which stood at 20191 lots as against 20265 lots yesterday.
source: Capital Market