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Monday, May 04, 2009

Gold trims gains as dollar, equities, oil all betray

Last weeks more than $25 fall in gold is however keeping it afloat with gains

Gains got trimmed in gold as dollar rose very smartly against all the major currencies today. The gains in US equity futures and Asian and European markets are also hampering the demand for gold. Oil also fell in negative zone as the US dollar pressurized all the dollar priced assets.

The US dollar had solid recovery against the major currencies today, the dollar rose more than 0.5% against the pound and the single currency. It surged the most against the Pound, up 0.63% to 0.6736. Against the Japanese Yen it is up 0.15% to 99.34.

In equities, European stocks were generally higher, though British markets were closed for a holiday. Asia markets also surged. In the absence of Tokyo, closed for a holiday, several regional indexes, including Hong Kong, Taiwan, India and Singapore, gained more than 5% amid signs of improvement in the region's economies.
U.S. stock futures were pointing to a higher open for Wall Street, with key housing data and some renewed worries for banks in focus for investors.

On the docket for Monday, pending home sales for March are due to be released at 10 a.m. Eastern. Construction spending for March will also be released at the same time. The biggest piece of economic data comes Friday, with the March nonfarm-payroll report.

An ounce of Gold on the COMEX division of the New York Mercantile Exchange is trading up $3.6 at $ 891.8 per ounce. The trade may remain range bound today with gold getting support after last weeks fall and the dollar, equities and oil all moving against the metal. Last week gold crashed by more than $25 to close the week at $ 888.2 per ounce following late rally in the equity markets.

MCX June Gold topped out from Rs 14357 earlier today and right now it is trading at Rs 14329 up Rs 38 per 10 grams. We had suggested in the morning that the counter may face resistance at 14356 level and that had been materialized successfully. The gians in Indian Rupee also pulled the metal from its days high. The rupee strengthened to the highest level in more than two weeks after data from the Securities & Exchange Board of India showed foreign investors bought $1.3 billion more Indian shares than they sold in April. The partially convertible rupee was at 49.82/83 per dollar, off an intra-day high of 49.55, it's highest since April
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