Gold..............
MCX Gold futures gave away their early gains and slipped in the
afternoon as the global prices continued to witness selling pressure
amid a weak undertone in the Euro. The metal had plummeted to its seven
month low as minutes of the latest FOMC meeting showed policy makers
were divided about the strategy behind Chairman Ben Bernanke's program
of buying bonds. The metal had slipped to a low near $1550 per ounce
last night but jumped from these levels on bargain hunting. The counter
came off highs near $1590 per ounce today and currently trades at $1580
per ounce, up $1.40 per ounce on the day.
Euro stayed under
pressure today and tested its seven week low under 1.3160 against the US
dollar, dropping for a third session in a row. The German economy
suffered a setback towards the end of 2012, data out today showed. The
Federal Statistical Office (Destatis) stated that the German GDP
decreased by 0.6% in the fourth quarter of 2012 compared with the
previous quarter.
Meanwhile, the financial market conditions in
the EU have improved substantially since last summer. But economic
activity has been disappointing in the second half of last year.
However, leading indicators suggest that GDP in the EU is now bottoming
out and economic activity is expected to gradually accelerate, noted the
European Commission (EC) in its first winter economic forecast for the
euro area and the European Union as a whole
The pick-up in growth
will initially be driven by increasing external demand. Domestic
investment and consumption are projected to recover later in the year,
and by 2014 domestic demand is expected to take over as the main driver
of strengthening GDP growth. The weakness of economic activity towards
the end of 2012 implies a low starting point for the current year.
Combined with a more gradual return of growth than earlier expected,
this leads to a projection of low annual GDP growth in 2013 of 0.1% in
the EU and a contraction of 0.3% in the euro area.
The yellow
metal has dropped nearly 150 dollars from its late January highs and the
current spate of selling has been triggered by worries on US monetary
policy as well as technical factors. The metal is facing the “death
cross”- a peculiarity in technical charts, which entails the 200-day
Exponential Moving Average (EMA) falling under the 50 day EMA. While the
futures market participants remain nervous on this count, there is a
possibility that the domestic spot market buyers would lap up the metal
as the spot prices linger around their seven-month lows. MCX Gold
futures faced a resistance at Rs 29800 per 10 grams today and eased. The
counter trades at Rs 29588, down Rs 154 per 10 grams on the day.
Source by Commodity Insights
No comments:
Post a Comment