Commodity prices melted for a second successive day today and Gold was hurt badly. The Gold futures slumped under $800 mark yet again as the traders began to wonder whether the losing ways in Gold keep the sustained downtrend well and truly intact and 1000+ levels indeed marked a long term top in place for the yellow metal. The fact that the combination of falling commodity prices tend to provide support to the equities market, may act against Gold in near term as it fails to provide any connivance yield as an asset class.
The current retreat in Gold was no surprise given the across the board slide in the major commodities like crude oil, copper and agri counters like Corn and Soybeans. Crude oil plummeted to $105.46 in intraday moves and made the world realize and that we might be closing in on $100, a levels so very crucial, that if broken convincingly, it may bring an end to the commodity prices story of the last one year.
The US dollar continued its awesome form to hit below 1.4500 levels against Euro today, extending a rally into the week that marks the release of Non farm payrolls on Friday. The current rally in the US dollar is being fueled by the one of the Nikkei newspaper scoop last week that European, Japanese and U.S. officials in mid-March drew up plans to strengthen the U.S. currency following troubles at Bear Stearns Cos.
The alleged news is out now and is playing a crucial role in extending the rally of the US currency that has strengthened sharply since the first week of August. The Olympics marked a critical turning point for the currency and an 11% appreciation since the all time low levels is auguring well for the greenback as latest reports suggest that the other major economies in the world are experiencing sharp economic contraction.
The global macroeconomic slowdown extended further in last few days with Euro zone clearly displaying signs of entering into recession as German GDP growth plummeted for first time in almost four years. Japan, the second largest economy in the world also contracted for the first time in four quarters in the second quarter ended in June as the key growth drivers of exports, private consumption and capital investments lost momentum.
COMEX Gold extended its losses today as the benchmark December futures slumped to a low of $798.20, dropping almost $30 in intraday moves. The counter currently trades near the same level. MCX Gold futures for October lost nearly Rs 300 in intraday moves and currently trade down Rs 256 at Rs 11543 per 10 grams.
The current retreat in Gold was no surprise given the across the board slide in the major commodities like crude oil, copper and agri counters like Corn and Soybeans. Crude oil plummeted to $105.46 in intraday moves and made the world realize and that we might be closing in on $100, a levels so very crucial, that if broken convincingly, it may bring an end to the commodity prices story of the last one year.
The US dollar continued its awesome form to hit below 1.4500 levels against Euro today, extending a rally into the week that marks the release of Non farm payrolls on Friday. The current rally in the US dollar is being fueled by the one of the Nikkei newspaper scoop last week that European, Japanese and U.S. officials in mid-March drew up plans to strengthen the U.S. currency following troubles at Bear Stearns Cos.
The alleged news is out now and is playing a crucial role in extending the rally of the US currency that has strengthened sharply since the first week of August. The Olympics marked a critical turning point for the currency and an 11% appreciation since the all time low levels is auguring well for the greenback as latest reports suggest that the other major economies in the world are experiencing sharp economic contraction.
The global macroeconomic slowdown extended further in last few days with Euro zone clearly displaying signs of entering into recession as German GDP growth plummeted for first time in almost four years. Japan, the second largest economy in the world also contracted for the first time in four quarters in the second quarter ended in June as the key growth drivers of exports, private consumption and capital investments lost momentum.
COMEX Gold extended its losses today as the benchmark December futures slumped to a low of $798.20, dropping almost $30 in intraday moves. The counter currently trades near the same level. MCX Gold futures for October lost nearly Rs 300 in intraday moves and currently trade down Rs 256 at Rs 11543 per 10 grams.
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