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Wednesday, December 09, 2009

Gold Recovers After Dropping $100 From All Time Highs

Gold came off its early lows today as traders bought the commodity after a nearly 100 dollar slide in less than a week ensured that the safe haven edge of the commodity comes back in the foray. The futures came off after nearly to $1130 as the dollar eased from a five week lows against the Euro. The jittery state of affairs in the global economy also supported the yellow metal. The losses in equities also weighed after DOW JONES fell to the lowest levels since the start of November yesterday. 

Worries over a sovereign default in Greece have spooked the trading investors of the players in risky assets. Greece already pays almost 2 percent more in interest on its debt than Germany. In other words, at a total debt of €270 billion ($402 billion), Greece will be paying €5 billion more in annual interest than it would if it were Germany. And, with rating agencies threatening to downgrade the country's already dismal credit rating, the situation is only likely to get worse.

COMEX Gold futures for February rose from levels near $1130 to currently hover at $1138, at the previous closing price only. MCX Gold futures for February also came off their lows of Rs 17141 per 10 grams to currently trade at Rs 17279, still down Rs 166 per 10 grams from the previous close or nearly 1%. The open interest is down 2.90%.
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