MCX Gold futures are up about Rs 100 per 10 grams on the day in the early moves as the COMEX Gold consolidated around its three and half month lows after the recent scurry of losses. The metal stumbled further yesterday, dropping to a fourth consecutive session as US stocks slipped from two-month highs on renewed worries over the fiscal cliff, undoing the nascent hopes earlier in the week which had boosted the equities. The COMEX Gold continued to extend losses after breaking under $1700 levels and dropped to a low near $1660 for a second day. The metal quotes at $1669.30 per ounce right now, up $1.60 per ounce on the day.
The Euro topped 1.3300 levels against the US dollar yesterday, nearing its nine month highs after the Ifo German business climate index, a closely-watched gauge of business confidence in Europe's largest economy, edged higher for a second consecutive month in December. The index hit 102.4- it highest in five months. While companies assessed their current business situation as somewhat less favourable than last month, they were considerably less pessimistic about future business developments. As the year draws to a close, German companies are more confident about the future.
However, the single currency came off these highs given the sell off in global stocks. President Obama accused his Republican opponents of making the cliff debate personal. Republicans fired back, saying the President's opposition to House Speaker John Boehner's so-called Plan B is bizarre and irrational. Speaker Boehner's Plan B consists of raising income taxes only those American households earning more than $1 million per year while keeping current tax levels in place for all other taxpayers.
DOW dropped by nearly 100 points and led Asian stocks lower today. Gold is likely to witness a recovery after sustained selling over last few days but the year end trades would make it difficult to witness an open ended commitment on the long side despite the bargain prices. MCX Gold futures are trading at Rs 30913, up Rs 94 per 10 grams on the day with 1.24% drop in the open interest. Prices need to break above Rs 31k first to witness more buying.
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