COMEX Gold futures soared to fresh high above $1260 per ounce before witnessing some moderation as the equities improved from lows and the US economic data alleviated some of concerns, calming investors down. However, the metal is still in a pretty good shape, particularly with the reports stating another IMF Gold sales to central bank. The commodity has been in a sublime touch after correcting heavily in the end July, adding nearly $100 in a span of around five weeks as the strong investment demand and the onset of Indian festive season boosted the sentiments in favor of the yellow metal.
Gold was hammered in the last two weeks of July 2010 in the wake of global economic worries and rising deflationary influences in US. The strong dollar, strong gold permutation worked against the bullion as the prices encountered hefty selling on every rally. The US dollar continued to plummet against the Euro, sliding to a three month low of 1.3100 and hurt the sentiments for the yellow metal. COMEX Gold futures for August were crushed to a three month low of under $1160 an ounce, shedding nearly 100 dollars within a span of around one month.
However, the buying picked up from these levels as equities in advanced economies witnessed significant corrections and the US dollar swung back into action as the preferred safe haven. The Japanese Yen also rallied to a 15 year high against the dollar and Gold rose in tandem with both these assets, carving out spectacular gains from the mid August period once the $1200 threshold was crossed.
The International Monetary Fund announced on 9th September that it would sell 10 metric tons of gold to Bangladesh, worth around 403 million dollars. The transaction is part of the total sales of 403.3 metric tons approved by the executive board, the IMF said in a statement. That decision was taken last September and was followed by the sale of 212 metric tons of gold to the Reserve Bank of India, the Bank of Mauritius, and the Central Bank of Sri Lanka. IMF members agreed in 2008 that the fund could sell an eighth of its gold assets, which total around 3200 tonnes in order to diversify its financial model so that it no longer relies on lending.
COMEX Gold futures for December closed at $1250.90 per ounce on 9th September, after testing a low of 12.43.50 per ounce. MCX Gold also backed off after hitting highs above Rs 19200 per 10 grams and ended under the all-important Rs 19000 per 10-gram levels. The traders are likely to eye Rs 18800 levels as a critical support in case the prices drop further from hereon.
