Gold plummeted yet again today; witnessing a free fall to extend its mega downward lurch towards its September lows. The metal has been getting hammered amid year end trades and the primary influencing factor is yet again the US dollar. Dollar broke under 1.2900 levels against the Euro today, extending its recent rally to test fresh highs for the current year as European stock markets pared earlier gains after mixed results from the auction of Italian longer-dated government bonds. Yields on three and 10-year debt fell as Italy sold €7.017 billion ($9.07 billion) in the auction, though the amount fell short of the expected €8.5 billion.
The yellow metal has had a very difficult time in the current week, falling nearly in a vertical manner after the prices tumbled under the critical $1600 per ounce mark. The extent of the drop has been rather surprising given that economic turbulence and an across the spectrum slowdown should ideally support the metal on its safe haven count.
However, flow with the risky assets seems to be the only way for gold right now. Risky assets, i.e. stocks were sent reeling lower in Asia and the same happened in Europe as markets decided that the European bond auction was not as well as expected. Traders completely ignored remarks from Italian Prime Minister Mario Monti who noted that it was a relief that the spread between German and Italian 10-year benchmark bonds has narrowed since November.
COMEX Gold tested a low of $$1523.90 per ounce and currently quote at $1531, down $33.10 per ounce on the day. This has been a disastrous week for gold as the commodity has dropped nearly 80 dollars in last four sessions. MCX Gold futures slumped well under Rs 27k mark today, testing a low of Rs 26517 per 10 grams and currently trades at Rs 26648, down Rs 633 or 2.30% on the day.
Powered by Commodity Insights