Gold Trade To Three And Half Week Lows

MCX Gold futures extended their losses as the COMEX futures tested their three and half month lows. The metal was dominated by the settlement related trading activity and gains in overnight US markets also hurt the appeal of the commodity. The metal has dropped by around 35 dollars in last two sessions now. The COMEX Gold failed to hold on to its one month high above $1600 per ounce in the last week and a firm undertone in the US dollar is not helping the metal much either. The counter quotes at $1570.10, down $5.80 per ounce on the day. Prices corrected nearly 25 dollars in the last session.

US stocks jumped to all time highs yesterday and traders sold off gold rapidally in the awe of the near month futures settlement. Meanwhile, the US dollar consolidated just above 1.2800 levels against the Euro. Eurostat said that the euro zone's unemployment rate held steady at a seasonally adjusted 12 percentage in February, unchanged from January but still at record highs. Eurozone showed a marginal improvement in PMI numbers at 46.8 in March compared to 46.8 in February. The numbers are still below 50 mark that is treated as the borderline above which it is treated as growth. Further on the negative front, the PMI data indicated an overall deterioration in German manufacturing business conditions, largely reflecting a renewed decline in new orders and stagnation in production volumes.

North Korea said yesterday that it intended to restart a nuclear reactor closed in 2007 and hinted it may begin openly enriching weapons-grade uranium at a time of soaring military tensions. A nuclear energy spokesman said the move would involve readjusting and restarting all the facilities at the North's main Yongbyon nuclear complex, including a uranium enrichment plant and a five megawatt reactor.

MCX Gold futures for June, the recently turned benchmark contract slipped under Rs 30000 per 10 grams level yesterday and dropped nearly Rs 400 amid a heavy sell off in global markets. The counter extended this drop and tanked to Rs 29357 per 10 grams today. The commodity is quoting at Rs 29507, down Rs 98 per 10 grams or 0.33% on the day with 1% increase in open interest. A modest bounce emerged in the afternoon trades as Indian Rupee gave up following heavy losses for local equities.