Gold fails to hold above $1470

Gold.....

MCX Gold futures

slipped on profit selling today as traders locked some gains after recent array of good gains. Prices had edged up above $1470 per ounce in last session as the metal extended its amazing run higher amid a weak US dollar and ideas that excellent demand from all the quarters is supporting the yellow metal after the prices tumbled to lows near $1300 per ounce around two week back. The US dollar tumbled to a near two week low above 1.3100 against the Euro. Good gains in US stocks made gold consolidate its gains. However, a mixed outing in Asian stocks pulled the metal off its recent highs. COMEX Gold is quoting at $1464, down $3 per ounce on the day.

US stocks jumped yesterday with the DOW adding more than 100 points. US pending sales of homes edged up by 1.5% in March, reversing February's decline, the National Association of Realtors reported yesterday. The pending-home-sales index increased to 105.7 in March from 104.1 in February, and was up 7% from March 2012. Economic data out earlier in the day showed that the Euro zone consumer confidence edged up to -22.3 in April, from -23.5 in March. These data pointers mostly kept the US dollar around 1.3100 mark against the Euro.

Gold had tumbled in a freakish manner a few days back. There were concerns that debt stricken European country Cyprus might have to sell gold holdings to raise finances. Traders fear that this would load up supplies in global markets in the short term. Massive unloading in Gold ETF's was also responsible for the worst crash in gold prices for three decades.

However, the demand-supply scenario remains in favor of the metal. Total recycled gold supplies went up nearly 34% to 1,625 tonnes in CY 2012 from 1,212 tonnes in CY 2008 due to the massive spurt in prices last year. This source of inflow is surely likely to see moderation this year given the 20% drop witnessed in prices from year to date.

The movement in today's session is showing signs that some selling is likely to emerge as traders wait for the key central banking decisions- starting with the FOMC meet today. MCX Gold futures tested under Rs 27000 per 10-gram levels, marking a loss of Rs 300 per quintal since yesterday. The metal quotes at Rs 27040 per 10 grams, down Rs 111 per 10 grams on the day.

Source by Commodity Insights