MCX Gold witnesses modest correction after latest gains

MCX Gold futures slipped slightly in the early moves, giving up after a massive rally in the Friday's session.

Gold futures got a boost on the disappointing jobs data, which put to rest recent sentiments that the Federal Reserve may consider tightening policy in the coming months.

The U.S. Bureau of Labor Statistics reported earlier the economy added 88,000 nonfarm payrolls in March, way below expectations for a gain of 200,000 and below the 268,000 jobs added in February.

The metal edged up at a ferocious pace following this, adding nearly 30 dollars in intraday moves.

The counter currently quotes at $1576.90, up $1 per ounce on the day. 

The US non farm data revealed that the private sector added 95,000 jobs last month, after an increase of 254,000 in February, missing expectations for a 209,000 rise.

The report also showed that the U.S. unemployment rate ticked down to 7.6 per cent in March, from 7.7 per cent the previous month, as more Americans left the labor force.

The news sent the dollar falling and gold rising on expectations for the Federal Reserve to keep monetary stimulus programs in place, including its USD85 billion monthly bond-buying program that weakens the greenback as a side effect.

The June COMEX gold futures had tumbled to 10 month low of $1539.4 earlier this week, however it jumped back to end the fortnight at $1575.9 an ounce.

It rallied to a one-month peak in March on worries about fiscal stability in Europe, as politicians scrambled to clinch a bail-out for Cyprus.

Fear that central banks' money-printing to buy assets will stoke inflation has been a key driver in boosting gold, which rallied to an 11-month high in October after the Fed announced its third round of aggressive economic stimulus.

The international gold prices are down nearly $80 from its last year's level as the US dollar has appreciated.

The June COMEX gold futures are trading at $ 1575.9 an ounce as on 5th April 2013 whereas last year the metal has been trading near $1650 an ounce levels.

The US dollar has gained nearly 2 per cent in April 2013 compared to the same period last year. 

There could be some upside resistance for the yellow metal after the massive array of gains seen on Friday.

The US dollar is quoting just under 1.3000 levels against the Euro, coming off its two-week low levels.

MCX Gold futures slipped as the Rs 29800 barrier yet again triggered a correction.

The counter quotes at Rs 29707, down Rs 60 per 10 grams on the day with 1 per cent drop in the open interest.

Gold Tips

Gold futures began week on strong note in Asia electronic trades today, after retreating 1% last week on ongoing fears over the looming fiscal crisis in the U.S. and growing tension in the Middle East.

December delivery gold futures are trading up $7.3 at $ 1722 an ounce on the Comex division of the New York Mercantile Exchange. The counter may find support near $1685 levels with resistance near $1740 levels in the near term.

Silver for December delivery fell 1.1% on Friday to settle the week at $32.30 a troy ounce. Earlier in the session, silver futures touched a one-week low of $32.02 a troy ounce. On the week, silver futures shed 0.7%.

Investors continue to remain concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.

Gold hit a one-week low of $1,704.55 a troy ounce on Thursday, after the World Gold Council said global demand for the precious metal dropped 11% in the third quarter.

In the coming week, market participants will be focusing on developments relating to the U.S.http://www.commoditytipsadvisory.com/ fiscal cliff, as well as Tuesday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment.

MCX December gold futures may open today’s session near Rs 31,670 levels with resistance near Rs 31700 -750 levels.

MCX Gold Tips

Stock Markets Weaken Gold Prices:

Unexpectedly weak results from Google dragged down equities on Friday, while the euro fell against the US Dollar, hurt by a perceived lack of progress on a Spanish bailout request. That weighed heavily on Gold Prices, which become more expensive for holders of other currencies when the US Dollar firms. The Google results were followed by other major U.S. companies, General Electric to McDonald’s Corp. and Microsoft Corp. reporting disappointing earnings results on Friday added pressure on World stock markets. The S&P 500 slipped for a second day after rallying 2.3% over the previous three sessions. With three weeks to go before the U.S. Presidential election there’s a bit of hesitancy to keep bets open. Markets are largely in a ‘wait and see’ mode at the moment, with elections in the United States and the transition of power in China happening early November. “Given the importance of China and the US in the global economy, we might not see strong positioning taking place in the next few weeks.

Gold Tips

MCX TIPS :-

MCX Gold futures witnessed a decent recovery in afternoon trades as the global prices edged up above $1740 per ounce though the sentiments could remain depressed following worries over demand in the near term. The metal has been trading lower in the last few days and tested a one month low on COMEX yesterday as the downward correction extended further. Latest Chinese import figures reflect a mild softening in the demand from the world's largest consumer. COMEX Gold futures are quoting at $1742, up four dollars per ounce on the day.

Trade statistics released last week showed mainland Chinese imports of gold from Hong Kong slowed dramatically in August. Hong Kong shipments of the metal to mainland China for the month totaled 54 tons, a drop of 29% from the 76 tons shipped in July, according to data from the Hong Kong Census and Statistics Department. The yellow metal has witnessed a sizeable fall in last two sessions, shedding nearly 50 dollars per ounce amid a flurry of profit selling as the inability of the metal to break above $1800 per ounce levels had a depressing effect on the sentiments. The commodity normally follows risky assets and yesterday's massive jump in stock markets should have helped it.

Meanwhile, the US retail sales were boosted yesterday by the launch of iPhone 5 and registered 1 a rise of 1.1% in September. Equity markets were further helped on media reports that Spain is ready to make a formal request for aid, allowing the European Central Bank to buy its sovereign debt, but is delaying an announcement due to concern about the effect on other euro-zone members.

European equities edged mostly higher today and some buying has emerged in Gold as well. Euro also gained, breaking above 1.3000 levels against the US dollar. This has helped it gain some ground from its one-month low levels of $1728 per ounce and it would be interesting to see how the New York session pans out. The local MCX Gold futures broke under Rs 31000 per 10-gram mark yesterday and witnessed a steady recovery in tune with the global prices. The benchmark December contract on MCX is trading at Rs 30973, down Rs 4 per 10 grams on the day after testing a low of Rs 30862 per 10 grams earlier in the day.

MCX TIPS BY COMMODITY TIPS ADVISORY