Tuesday 14 May 2013

MCX Gold Slips Well Under Rs 27000

Gold.....

witnessed a bearish movement in the second session of the week. The counter slipped well under Rs 27000 per 10 grams today, unable to hold onto an intraday rally as global prices yet again neared their two week low amid a burst in dollar strength and a general weakness in commodity prices. The COMEX Gold futures quote at $1427.40, down $6.80 per ounce on the day. The counter had hit a high above $1440 per ounce earlier.

The Gold prices had witnessed a similar movement in the last session. US data out yesterday showed that the sales at US retailers edged up in April, helping ease concerns about consumer spending in the world's largest economy. The retail sales went up by 0.1% followed a 0.5% drop in March. Retail purchases climbed by the most in four months minus receipts from service stations, where cheaper gasoline prices dampened the dollar value of sales.

The US Federal Reserve should slow and then halt bond purchases when it's time to exit from the central bank's quantitative easing efforts, Philadelphia Fed President Charles Plosser stated today. The Fed is buying $85 billion per month of Treasury and mortgage-backed securities- ensuring that the US dollar edges higher. The German investor confidence index calculated by the ZEW economic institute edged up slightly by 0.1 point to 36.4 points in May after falling sharply last month.

Though this was a modest uptick, investors remained worried about the investment climate in the largest economy in the Eurozone. The reading comes after the index slumped to 36.3 in April, triggering worries about Germany's economic performance and the country's ability to pull the rest of Europe of sluggish growth.

In Europe today, euro-zone finance ministers are gathering in Brussels today to discuss the economic situation in the region. They are reviewing bailout programs in Cyprus and Spain, and may sign off on aid payments to Greece. This is also keeping investors nervous, leading to a general sell off in risky assets. MCX Gold futures for June had slipped under Rs 27 k yesterday and broke under another key support of Rs 26800 per 10 grams today. The counter quotes at Rs 26736, down Rs 118 per 10 grams or 0.44% on the day with a marginal increase in open interest.

Source by Commodity Insights

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