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Wednesday, June 10, 2009

Gains escalate in yellow metal; oil, equities rally

Oil inventories and other data releases to dictate the course in bullion

Yellow metal escalated its gains in the mid day London following losses in the greenback, which traced back to the 1.4100 Euro mark. Oil futures also jumped higher more than $1.5 at $ 71.3 per barrel enhancing the rally in gold.

MCX August gold futures struck the high of Rs 14720, breaching both the resistances mention in the morning update. The buy on dips strategy has worked quite successfully today and the traders are now suggested to take position after the oil inventories data is released. A break below the 14630 levels may change the course in the counter and it may fall to 14580 and 14555 levels. On the other way round the resistance comes around 14760 and 14810 levels.

In the data releases so far today, which had impact on their respective currencies are -- U.K. manufacturing output saw a monthly rise of 0.2% in April, for a fall of 12.7% compared to the same month last year, the Office for National Statistics said Wednesday. Industrial production rose 0.3% in April and fell 12.3% compared to April 2008. In other data Britain's April trade deficit in goods widened to 7 billion pounds ($11.4 billion) in April, up from 6.5 billion pounds in March, the Office for National Statistics reported Wednesday.

In the currencies the US dollar plunged very heavily today against the Euro and Pound. However it rose against the Yen indicating good appetite for risk in the financial markets. The dollar fell 0.7% to 1.6424 pounds and fell 0.35% against the single currency.

An ounce of Gold on COMEX Division of the New York Mercantile Exchange jumped to $ 964.6 up $9.9 per ounce. The movement from here depends on the economic data releases from US and oil inventories data.

Comex gold warehouse stocks were up 1,074 ounces at 8,700,713 ounces Tuesday, while silver stocks were down 1,080 ounces at 120,754,973 ounces.

Today's economic calendar contains US we have beige book, federal budget balance, weekly oil inventories, trade balance and speech by FOMC member Lacker.
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