Gold cools off

The local bullion market saw prices giving way just a little bit from yesterday's highs, however, maintaining the momentum for the fourth consecutive day.

In Mumbai, gold (99.50 purity) closed at Rs 6610.00 per 10 gram, the same as yesterday while 99.90 gold closed at Rs 6550 mildly higher than the previous close of Rs 6645. Silver (.999) closed lower than yesterday's level of Rs 12240 to end at Rs 12140 per kilogram.

In the international markets, spot gold started the trading day at $444.25, higher from yesterday's closing levels of $441.75. Yesterday, the prices had hit a high of $445 before coming down.

On the New York Mercantile Exchange's Comex, the benchmark December gold futures contract saw initial trading levels of $444.50, as the dollar, currently hovering around the critical 1.30 levels against the euro, is not showing any signs of recovery.

Coinciding with the 16-year highs witnessed in the international markets, trading on the Indian futures market also saw gold and silver volumes reach new highs as well following the trend.

The National Commodities and Derivatives Exchange of India (NCDEX) recorded an all-time high volume in precious metals on November 18, at 1070.4 kilogram of gold while in silver it was 285360 kg.

The volumes of gold on the Multi Commodity Exchange (MCX) were at 9195 kg and in silver it was 644540 kg. Technically, analysts point out that the prices all have been going up without any correction with a series of divergences.

This indicates that a correction could be expected soon. In accordance, many traders believe that the bull-run is long due for correction, and have begun liquidating their positions in the futures market.