Gold Glittering No More As Steep Losses Hurt Sentiments - Dec 02, 2008

With the very first day of the last month of a landmark year bringing in an unprecedented sell-off in all the asset classes, Gold was also not spared and as the dollar strengthened below 1.2600 against the Euro and a rapid decline in oil prices hurt the sentiments further for the Gold bulls. The COMEX futures eased well below $800 per ounce yesterday, slumping nearly 5%. The slide has come as a shock for most of the market participants, which thought that the yellow metal was headed upwards given the utterly negative macro economic picture around the global and terrorist attacks in Mumbai

The COMEX February futures extended their losses further in the Asian trades today, touching a low of $763.40 per ounce and recovering afterwards. The counter currently trades at $771.70 per ounce, down $5.10 an ounce. The US dollar quotes at 1.2610 after hitting a high of 1.2581 earlier.

MCX Gold futures also eased as the December expiry extended a further negative influence on the commodity. The near month futures dipped to a low of Rs 12511 and currently trade at Rs 12535, down Rs 590 per 10 grams or 1.20% from the previous close with a massive 26% drop in the open interest.

MCX February contract trades at Rs 12537 per 10 grams, down Rs 591 or 1.14% with 1.30% decline in the open interest. The counter is expected to find a support around Rs 12490-510 levels.