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COMEX Gold Up Nearly 6% In 2012

Capital Market/ 17:08 , Dec 31, 2012

COMEX Gold has returned around 6.30% for the investors in the year 2012, maintaining its positive streak of annual runs for a 12th time. The metal had started on a positive note as an all-pervasive rally in global asset markets and weakness in US dollar supported in during the first couple of months of the year. However, the rally was cut short on lack of follow up Indian demand as the government slapped curbs on the local consumption by initiating various measures the most prominent being a lethal rise in import duties. By the mid of the year it was quite clear that the local demand would not be able to match up strong 900+ tonnes import witnessed in 2011. 

The metal was boosted in global markets in September following the QE3, whereby which the US Federal Reserve decided to launch a new program of open-ended bond purchases - saying it will buy $40 billion of agency mortgage-backed securities each month. The yellow metal jumped to its two year highs above $1860 per ounce following the Fed's continued faith in ultra cheap money and took the domestic prices above Rs 32000 per 10 grams by November following the weak undertone in Indian Rupee. Rupee had toppled to all time lows of 58 against the US dollar earlier in the month and has generally been on a losing track this year. 

The yellow metal yet again slipped in December, witnessing heavy losses as the highs of $1700 failed to sustain and thin year-end trading across the globe was little takers for Gold. The metal slumped to a four month low and was battered as the US fiscal cliff worries haunted investors. The commodity dropped even as the US dollar tested its eight-month lows, a rather surprising course of action given that a weak dollar normally boosts the appetite for the yellow metal. COMEX Gold is hovering around $1665 per ounce right now, up nearly 100 dollars per ounce on the day.

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