Gold dropped today, witnessing a corrective spell ahead of the non-farm payrolls as traders locked in profits after prices hit a two-week high yesterday. The metal has had a bearish week mostly, dropping for a third session in a row today and breaking under the key $1600 levels.
Gold failed to hold onto highs above $1600 yesterday after a flurry of central banking action. The Bank Of England launched yet another round of its quantitative easing programme, upping the ante by another 50 Billion Pounds and the ECB cut the main refinancing rate to 0.75%.
While these actions were very much anticipated by the market participants, a surprise rate cut from the Chinese central bank was not anticipated. The People's Bank Of China (PboC) cut its lending rate for the second time in a month, highlighting the overall glum in world economy.
COMEX Gold futures for August are quoting at $1595, down $14.40 per ounce on the day. The local gold futures have also dropped to Rs 29620, down Rs 126 per 10 grams on the day.
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