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Monday, April 20, 2009

Gold turns around; shoots up over $10

Traders find shelter in gold on bloodbath in equities

Gold Reverses Course; Shoots Up Over $10Gold futures reversed its course after trading lower in the Asian trades and then jumped by more than $10 as the beating in the European and US futures bolstered the demand for Gold as a refuge in times of turmoil.

European equity markets were also lower, as the German DAX 30 index declined 1.9% to 4,588.41, the French CAC-40 index declined 0.6% to 4,068.33. U.S. stock futures were lower, with financial-sector earnings back on the agenda. S&P 500 futures dropped 11.4 points to 855.40 and Nasdaq 100 futures fell 17.5 points to 1,334.50. Bank of America reports earnings on Monday. Dow industrial futures dropped 99 points.

However the slump in equities had an inverted effect on the crude oil futures, which were pulled lower by more than $2 to $49.90 per barrel.

MCX Gold futures jumped by nearly Rs 150 and hit a high of Rs 14179 per 10 grams. The traders are suggested to enter long on dips with the target of 14220 and 14285.

MCX benchmark may Silver futures also rallied by as much as Rs 364 to Rs 20242 per kg after hitting a low of Rs 19764 earlier in the session. It may find resistance around 20300 levels.

COMEX Gold June benchmark futures were up $9.4 at $ 877.3 per ounce. The up trend is likely to continue and next resistance comes at 885 mark.

The economics calendar is on the light side, with leading indicators for March the sole release of note.
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