Gold Remains Under Stress, Local Futures Drop Well Under Rs - TopicsExpress



          

Gold Remains Under Stress, Local Futures Drop Well Under Rs 30K MCX Gold futures are exhibiting signs of weariness today with the global prices under pressure following consistent strength in the US dollar. The correction seen in the commodity in last few days has hurt the bullish sentiments and the fact that the metal is down nearly five percent in local markets over last one year is a grave reminder of the volatility, which has become a permanent feature of the gold market over last couple of years. The US dollar has managed to hold onto its winning ways, currently trading at 1.3500 against the Euro- its highest levels in nearly five weeks. COMEX Gold quotes at $1311.60, $3.10 per ounce on the day. MCX Gold is quoting at Rs 29639, down nearly Rs 200 per 10 grams or 0.61% on the day. COMEX Gold tumbled in end October 2013, extending a slide from its six-week highs near $1360 per ounce mark. Gold futures dropped towards the psychological $1300 an ounce levels after the Fed concluded its 2-day meeting keeping the $85 billion bond-buying program unchanged as they intend to see more evidence of sustainable improvement. The metal settled around its two week low. The US dollar edged up from its two year low against the Euro and ended around its two week high of 1.3500, extending considerable selling pressure on commodities. Federal Open Market Committee (FOMC) concluded its two-day meeting with a decision to continue its current pace of asset purchases, while maintaining a stable outlook on the US economy. The market was expecting a more dovish statement from the Federal Reserve, especially after the disappointing September US jobs report. The Fed still sees evidence of moderate improvement in the US economy and the decision to wait-and-see with no word about future plans caused many to speculate that tapering asset purchases is still on the table. The yellow metal tumbled immediately after the statement from Fed and the US dollar shot up as market participants focused on the details of the Fed Statement. The US dollar broke above 1.3700 per Euro post the Fed statement up nearly 1% so far on the week. Gold surged more than 4% when the Fed Open Market Committee released its previous policy statement on September 18. The local gold spot prices also plunged below Rs 30k after rising above Rs 31k per 10 grams on Monday 28th October. The local prices are facing upward pressure as hardly any gold imports have taken place in August- September. Retail buying is picking up as the Indians gear up for Diwali andDhanteras festivals in early November. However, the quantum of buying is fairly low compared to the normal offtakes. The Union governments stern restrictions on gold imports have shown the expected results. Over the last three months, policymakers have cheered the sharp decline in Indias trade deficit. The annualized rate of the current account deficit (CAD) is running at around $25 billion, based on the last three months of trade data — about a third of what was feared at the start of this year. Powered by Commodity Insights
Posted on: Tue, 05 Nov 2013 09:21:29 +0000

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