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Saturday, November 14, 2009

$1100 Acts As A Tough Support For Gold

Gold rose in the mid London business hours today after falling to as low as $ 1101.2 per ounce, indicating that the $1100 may act as a firm support. 

The dollar slid against the euro before a report today that may show Europe's gross domestic product expanded for the first time in six quarters. Gold reached a record $1,123.38 an ounce yesterday before slipping 1.2%, the most in more than two weeks.

A slew of economic releases from Europe showed that the euro-zone economy finally escaped recession in the third quarter but advanced at weaker pace than economists anticipated. Led by Germany, the euro-zone rose at a 0.4% quarterly clip in the third quarter

December gold futures added $1.9 at $1,109.90 an ounce on the New York Mercantile Exchange's Comex division. The $1100 level should act as a firm support and it may again visit $1015 & 1020 levels.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged for a third day at 1,114.44 tons yesterday, its Web site showed. The holdings reached a record 1,134 tons on June 1.

Some profit booking came in the domestic gold after rallying near Rs 16900 level yesterday. Domestic gold on MCX was however unable to pick up with the international gold and was last seen quoting at Rs 16653 levels down more than Rs 100.

Gold rose to fresh peaks on three days this week, driven partly by last week's news that India's central bank bought 200 metric tons from the International Monetary Fund for $6.7 billion in October. This fueled speculation that other central banks, the biggest holders of bullion, may follow suit.
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