II:Gold Moves Up Aggressively, Euro Off 11-Month Lows
Gold surged today; breaking above $1600 per ounce levels quite aggressively as risk appetite returned to the world markets amid positive data from Germany and the supported the beleaguered Euro. Gold has been moving in line with the risky assets off late and a rise in the European stocks to the tune of around 1% augur well for the metal as it broke above $1600 per ounce in style, extending its recovery from around three and half month lows. The Euro recovered from its 11 month lows to quote at 1.3074 against the US dollar right now.
The DOW plummeted yesterday as the European Union finance ministers could not agree on providing 200 billion euros ($A262 billion) in new loans to the International Monetary Fund in an effort to boost their crisis firewall. Jean-Claude Juncker, the prime minister of Luxembourg who also chairs Eurozone finance ministers meetings, said on Monday that Eurozone states would provide just 150 billion euros to the IMF. This pulled Gold lower on the floor trading in New York with prices closing just under $1600 per ounce mark. US dollar stayed firm as concerns that the European debt crisis will hurt global growth supported the greenback.
However, the picture changed in the London trades today after German business confidence edged higher for a second month in December, signaling that a slowdown in Europe's largest economy maybe temporary. The Ifo institute's business climate index, based on a survey of 7,000 executives, rose to 107.2 from 106.6 in November, the University of Munich-based institute said today. Survey participants' responses showed that their assessment of the current business situation continues to remain favorable. Business expectations improved for the second time in succession. The German economy seems to be successfully countering the downturn in Western Europe.
COMEX Gold has gone up in the last three sessions despite the dollar consolidating its gains and it could be indicative of the fact that the yellow metal has bottomed out after the drubbing in the last week. The commodity quotes at $1607.80, up $11.10 per ounce right now. The counter has hit a high of $1610 per ounce earlier in the day. MCX Gold futures for February 2012 also broke above Rs. 27800 per 10 grams mark and currently trade at Rs. 27794, up Rs. 102 or 0.37% on the day.
