In overnight moves, COMEX Gold futures yet again edged up from lows under $1690 per ounce and rolled higher by more than 10 dollars in intraday moves amid supportive cues from US stock markets. Prices rebounded following news the European Central Bank cut its economic growth forecast for the European Union.
At its monthly meeting Thursday, the European Central Bank said that Euro zone economic growth would be stagnant to declining during 2013. The ECB projected overall EU economic growth at minus 0.3% during 2013. Just three months ago the ECB projected overall EU economic growth at 0.5% during 2013. That news sunk the Euro currency, boosted the U.S. dollar index and prompted fresh safe-haven demand for gold, to push the metal's price above unchanged on the day.
While this led to a massive jump in the US dollar, which broke under 1.3000 levels against the Euro, Gold remained unfettered from dollar's influence and instead recorded a bounce from lows under $1690 for a second straight day. MCX Gold futures for February tested lows of Rs 31916 per 10 grams yesterday but recovered thereafter, adding nearly Rs 300 in intraday moves.
The counter is quoting at Rs 31236, up Rs 11 per 10 grams on the day. There has been a heavy short selling in current week and a bounce in coming sessions would be witnessed only if some of these shorts are covered. The momentum seems to have turned positive though and will continue to remain so as long as $1700 levels remains protected on COMEX.
