Gold is down in Asia amid extremely volatile moves. The metal fell yesterday inelectronic session following an outright rejection of the Swiss gold referendum. However,a sharp swing upwards was noted in floor session in New York last night as plunging stocksand poor economic releases from around the globe triggered good safe haven buying. Themetal edged up from levels near five year lows and managed to post a massive 2% gain overthe previous close. The intraday rally in gold saw an upswing of nearly $60 per ounce.
However, these gains eventually took the metal to its highest levels in one month andthe counter failed to hold onto these highs. Asian trades today witnessed a massivecorrection in gold and the COMEX futures are currently trading at $1206.20 per ounce, down$11.90 per ounce on the day. MCX Gold futures for February 2045 are trading at Rs 26715per 10 grams, down Rs 224 per 10 grams or 0.83% on the day. The counter had tested highsabove Rs 27000 per 10 grams yesterday.
Yesterday, the Swiss National Bank (SNB) noted in a statement that it is“pleased” to hear of the outcome of the gold initiative vote. Swiss voterscrushed a proposal to boost central bank gold reserves which had made gold futures swingboth ways in last few days. The "Save our Swiss gold" initiative, which wouldhave compelled the Swiss National Bank to raise its gold reserves to 20% of its assetsfrom around 8% currently, was rejected by an overwhelming 77% of voters.
COMEX Gold futures failed to hold onto their rallies above $1200 per ounce last week.The yellow metal witnessed a solid correction in the last week of November following themassive rout in crude oil. The commodity had edged up earlier amid a general feeling thatprices have bottomed out after testing their weakest levels in four and half years fewdays back. Gold fell to lows near $1130 per ounce at the start of the month amidpersistent dollar strength and demand worries for the yellow metal.
Meanwhile, the Indian government removed restrictions on gold imports. It has beendecided by the Government of India to withdraw the 20:80 scheme and restrictions placed onimport of gold. The restriction was kept in place in August 2013 to curb the flow of metalin the country and to keep a check on the soaring current account deficit. This isexpected to boost the local gold supplies and could help keep the prices under check.Local spot prices have been hovering around Rs 26000 per 10 grams in major trading centresand the demand for jewellery remains strong.
US stocks slipped sharply yesterday. The US manufacturing sector slowed in November toits lowest rate of growth since January. Markit said its final U.S. ManufacturingPurchasing Managers Index fell to 54.8 from October's final reading of 55.9. This followedtepid global releases earlier in the day. The slowdown in the eurozone manufacturingsector continued into November, according to the latest PMI surveys from Markit. At 50.1,the final seasonally adjusted Eurozone Manufacturing PMI was only slightly above theno-change level of 50 and below its earlier flash estimate of 50.4.
China's manufacturing sector was stagnant in November with a PMI score of 50, thelatest survey from HSBC Bank stated. That was unrevised from last month's flash reading,and it sits right on the line that separates expansion from contraction. The index nowrests at a six-month low. Global credit rating agency Moody's Investors Service cut thesovereign-debt rating on Japan to A1 from Aa3, but said the outlook is stable. Worldstocks edged lower as a Chinese manufacturing gauge dropped and American holiday spendingslowed.
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