Hot Commodities: MCX Gold Hit On Negative Global Vibes, Down 3%

Gold....

MCX Gold futures were hit by a massive wave of selling in the international markets as weak technical cues, worries over failure of the metal to hold at higher levels and waning interest by the hedge funds all conspired to take tall a massive toll on the commodity for a second day. The COMEX Gold futures had slipped heavily on Friday and was seen breaking under $1500 levels though an intraday recovery emerged and made it close just above $1500 levels. This bounce proved fickle though and the metal went down in a hurry today, slipping to a near two year low of $1422 per ounce and currently trades at $1436.50, down $64.90 per ounce.

Asian markets mostly slipped and industrial metals as well as crude oil corrected as well as a tepid Chinese Q1 GDP data hit the markets. China National Bureau of Statistics showed that the GDP unexpectedly slowed down to 7.7% in first quarter of 2013, compared to 7.9% of GDP for final quarter of 2012. According to preliminary statistics, the GDP totaled 11.89 trillion yuan or $ 1.9 trillion in the first three months. China's full-year annual growth in 2012 eased to 7.8 percent, its weakest since 1999.

Nothing specific hit the bullion markets on Friday but it seemed that markets grew nervous ahead of the weekend after the plethora of downgrades witnessed to Gold prices by big names like Goldman Sacks and UBS. The metal has been witnessing a consistent buying by central bankers though and at these bargain levels, there is a possibility that demand from retailers would kick in, particularly in India and Middle East.

Indian Gold markets should witness a hurried activity given that the today's massive drop has taken spot prices to a 15 month low around Rs 27k mark in major trading centers like Mumbai, Delhi and Ahmedabad. The country imported around 100 tonnes of Gold in January 2013- its highest level in 18 months. MCX Gold futures broke under the critical 29k levels last week and extended the rampant fall. The metal traded at a low of Rs 26927 per 10 grams and currently trades at Rs 27051, down Rs 874 per 10 grams or 3.13% on the day with 4.80% drop in the open interest.
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