Bulls Takes Divorce From Gold

Gold futures hovered around in a range in the early London trades today, after having painful fall of more than $200 which finally separated the bulls from gold. The decade old relation between the bulls and gold seem to be broken now as the yellow metal tumbles below the phenomenal $1330 an ounce in the international markets and Rs 25300 per 10 gram levels in the domestic markets. The breakdown in the gold prices has relieved the Indian gold buyers luckily when the festive season comes near. India celebrates Akshaya Tritiya, a key gold-buying festival, next month, while the wedding season will continue until early June. So far this month the Indian gold prices have come down more than Rs 4000 per 10 grams and the silver prices have dived nearly Rs 10000 or 19% so far in the month of April. Gold for June delivery are trading down $5 to trade at $1,382 an ounce during Europe trading hours. It resumed their decline which has already pulled the front-month contract down by more than 8% so far this week. On Tuesday, gold rose $26.30, or 1.9%, on the Comex division of the New York Mercantile Exchange. The advance followed two consecutive sessions of declines which stripped prices of more than $200 an ounce. Gold prices were mauled Monday, marking their largest one-day loss since the 1980s, as they plunged $140.30, or 9.3%, to $1,361.10 an ounce. Sentiment in gold has suffered after recent cuts to price forecasts for the metal, as well as outflows from gold exchange-traded products. Goldman Sachs and Morgan Stanley have each cut their price forecasts for gold for this year and next.'' Goldman Sachs on Tuesday also cut its short gold recommendation to $1,400, saying exchange-traded-fund holdings show “acceleration in the liquidation of length, which points to a broad-based selloff extending beyond the futures markets, with potential more room to go.” Source by Commodity Insights