MCX Gold futures slipped in tune with their global counterparts as a
volatile spell in global equities pushed the metal lower. The US dollar
piled up further gains, nearing its three-week high against the Euro as
the rally post US Fed's “taper” comments stayed in place for the
greenback. The yellow metal was also hurt on an indication that highs
around $1300 per ounce levels are failing to hold. The metal slipped
nearly 20 dollars from these levels and currently trades at $1279.90,
down $12.10 per ounce on the day.Meanwhile, the global equities slipped sharply led by Chinese stocks. There are concerns over an acute liquidity crunch in the country after the short-term interbank interest rates hit record highs last week. Bulk of the stock indices in the region are down around 1-2% while the Chinese stocks have pared more than 5%. The commodity prices are down across the board as well with copper sliding near two year low.
In a keenly awaited move, the US Federal Reserve indicated last week that it would begin to taper its bond-buying program later this year. The Fed's announcement prompted dramatic declines in US markets on Wednesday and Thursday and also helped catalyse significant drops in international equity markets on Thursday. Ben Bernanke, the Fed chief told a news conference that the Fed expects to 'moderate the monthly pace of purchases later this year'.
Gold plummeted to fresh two and half year lows in global markets last week. However, the losses in local markets were limited as the Indian rupee dropped to a fresh all time low mark around 60 against the US dollar. The MCX Gold futures for August are quoting at Rs 26779, down Rs 341 or 1.26% on the day with around 7% increase in open interest. The Rupee is lingering around 59.50 per dollar mark.
Source by Commodity Insights
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