Gold Bounces On Bargain Hunting In Early Trades

Gold futures bounced in the early Asian hours today on bargain hunting after a near 1% drop on Friday. Today it expected to trade in a tight range today ahead of the US Federal Reserves decision on interest rates tomorrow. Crude oil futures fell in the morning trades today with NYMEX crude for delivery in January down by 4 cents at $87.89 per barrel.

Fed is now expected to cut its overnight rates by 25 basis points to 4.25% tomorrow, after the Friday's November payrolls data showed a 94,000 increase in employment and the jobless rate holding at 4.7 %, suggesting the economy was not falling off a cliff.

Gold for February contract is quoting at $803.8 an ounce up $3.6 from its Friday’ close of $800.2 on the New York mercantile exchange. The counter is expected to trade in a thin range with the traders remaining cautious ahead of the US rate decision. It should find resistance at $808 with the support around $779.

Domestic Gold futures for the benchmark February contract are up Rs 25 at Rs 10233 per 10 grams in Multi Commodity exchange (MCX). The counter should the first resistance at Rs 10260 with the next at Rs 10285 and the support at Rs 10200. The open interest for the contract is down 0.4% to 9125, indicating short covering.