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Monday, March 02, 2009

Gold retreats from day's highs

Local futures near Rs 16000 in intraday trades, frail movement in INR lends additional support

Gold retreated from its day's highs in the London trading hours today as traders took their time in realizing whether the current upturn is just a momentary bounce from the sharp slide witnessed last week or a healthy correction in a multi year bull run. The commodity had rallied after a four session losing streak on Friday as stock markets plunged and the safe haven status of Gold came out to support the yellow metal around $940 levels for the benchmark COMEX futures.

The commodity extended its upwards spiral in today's trades, opening the week on a positive note as the Asian equities slumped on a massive sell off in the banking and financial stocks. COMEX futures rallied to a high of $959.50 per ounce and slipped on profit sales thereafter. The counter trades at $947.80, up $5.30 per ounce.

MCX Gold futures neared the watershed Rs 16000 per 10 grams mark and eased on intraday profit sales and currently trades at Rs 15796, up Rs 292 per 10 grams or 1.90% from the previous close. The Rs 16000 mark is still acting as a very crucial psychological support for the commodity and physical demand at this level is utterly dismal as India failed to import any Gold in the last month due to a sharp spurt in prices. The constant weakness in Indian rupee, which plummeted to 51.80 against the US dollar, today also supported the commodity.

The commodity averaged Rs 14811 per 10 grams in Ahmedabad, up Rs 25% compared to the same period last year and kept the buying from the retail investors under check.

source: Capital Market
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