Yellow metal trades around $940 on continued buying interest
Gold rebounded from days lows in the mid London trades as investors continued to weigh the possibility of the yellow metal surpassing its all time highs soon, given he deteriorating conditions in the global economy. The metal recovered despite much of assistance from the usual triggers like dollar and crude oil and indicated that the direction in the immediate term remains positive.
The US dollar is threatening to break below its previous two month high of 1.2702 against the Euro, as the rising risk aversion is the global markets supports the greenback. Asian equities slipped today and Japanese yen rose against other major currencies on Monday after Group of Seven finance ministers stated it expects economic slump to persist.
The dollar traded near 91.50 yen, hovering around its highest levels since 1991 and indicating that the level of risk aversion remains awfully higher. Dollar clocked a high of 1.2727 against the Euro and currently trades at 1.2757. The currency had hit a high of 1.2702 on 2 February.
Meanwhile, the dollar has also been riding high due to increasing evidence that Euro zone is in the middle of a severe recession and worst could be yet to come. The German economy, the biggest in Europe, shrank by 2.1 percent in the fourth quarter, the most since the country's reunification nearly two decades ago, as exports fell with the global downturn, government data showed Friday.
The German Federal Statistical Office said that sharply falling exports - long a driver of German growth - and lower capital investment were important factors in the decline. The fourth-quarter figure was worse than the decline of roughly 1.8 percent economists and officials had expected.
Gold futures on the COMEX traded as low as $937.30 per ounce and currently trade at $942, near the previous close. MCX Gold futures for April are trading at Rs 14701, up Rs 72 or half a percent from the previous close with 3.76% increase in the open interest.
source: Capital Market
