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Monday, June 08, 2009

Losses fasten in yellow metal

Weakness limited in MCX gold on fragile rupee

Losses in gold futures fastened in the mid day London trades as greenback hit a high of 1.3804 against the Euro. Along with dollar, oil also added to weakness in the bullion today. The Conference Board Employment Trends Index is scheduled for release at 10 a.m. EDT (1400 GMT).

In other markets that have the potential to impact metals in the short term, the euro is down to $1.3840 from $1.3962 late Friday afternoon. In screen trading ahead of the pit open, the June S&P 500 futures are down 9.30 points to 931.20. July crude is down $1.01 to $67.43 in overnight activity.

This week we have the G8 weekend meeting of finance ministers and central bank representatives from Russia and the G7 countries: U.S., U.K., Canada, Germany, France, Italy and Japan.

In recent trading, spot gold was trading down $5.25 to $950.05. Comex gold warehouse stocks were unchanged at 8,721,752 ounces Friday, while silver stocks were up 619,565 ounces at 120,494,869 ounces

A move above $966 in the COMEX August Gold may then result in some upward movement in gold otherwise it may fall to 952 and 942 levels. Right now the contract is trading down $ 12.9 at $ 949.7 per ounce.

Some extra recovery was seen in the local gold futures as the weakness in Rupee supported the assets denominated in that currency. MCX August benchmark contract is down Rs 39 at Rs 14596 per 10 grams. The open interest in the counter is also down 1.7% from the previous close, indicating some profit selling.

On the data front this week we have, Euro-zone Sentix Investor Confidence Index of the confidence level of investors in the economy and the German Manufacturers' Orders on Monday, on Tuesday we have Japanese Leading Indicators and the German Trade Balance, German Industrial Production, while the only notable U.S. economic report will be the U.S. Wholesale Trade, measuring the dollar value of sales made and inventories held by merchant wholesalers. Wednesday will start with the German CPI- Consumer Price Index, U.K. Industrial Production and Manufacturing Output, the U.K. Trade Balance, then comes the U.S. Treasury Budget Balance, along with the Fed's Beige Book. Thursday will begin the European Central Bank's Bulletin of statistical data, followed by the U.K. Inflation Expectations Index, from US we have the U.S. Retail Sales, Weekly Jobless Claims, and the U.S. Business Inventories. On Friday the Euro-zone Industrial Production, U.S. Import and Export Prices, and the preliminary estimate of the U.S. Consumer Sentiment, the University of Michigan's consumer sentiment survey.
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