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Tuesday, February 03, 2009

Gold Holds 14 K Terittory

Support Provided By Demand From ETF

After slumping from the six month high levels Gold prices started today's session breaking crucial support levels. The prices are set to correct further if the trend continues. MCX Gold contract for April expiry which will become benchmark contract after 5th Feb 2009 is now trading at Rs 14133 per 10 grams down Rs 81.
In another news, the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings rose 9.78 tonnes to a new record of 853.37 tonnes of gold as of February 2 an increase of more 9 percent in the past month. This is helping the prices of Gold to hold the 14 k territory. COMEX Gold February expiry is now trading at $ 906 per ounce down $ 1.

Last night, Gold ended down $ 20.60, or 2.2%, at $ 906.70 an ounce on the Comex division of the New York Mercantile Exchange. It rose 3.5% last week to end at $ 927.30 an ounce, the highest closing level for a front-month contract since July.

Gold futures also turned lower Monday on the heels of two winning sessions, dropping from their highest level in six months as the U.S. dollar rose sharply against the British pound, reducing the metal's investment appeal.

Also helping gold move lower Monday, crude-oil futures fell back toward $40 a barrel, ending at the lowest level in two weeks. In another news, IMF said that the global economy is mired for a "major downturn," the trimming its 2009 forecast for Asia's gross domestic product to 2.7 percent from the 4.9 percent forecast in November - although Emerging Asia could still see economic growth of 5.5 percent, the think tank said.

source: Capital Market
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