Global rally sparks home run

Domestic Review / BULLION

The worldwide rally in bullion prices pushed up domestic gold prices to record highs. The price for standard gold in the spot market zoomed up to all time high of Rs 6110 and pure gold to Rs 6150 on Thursday.

However, slight decline in international prices led to paring of gains. Standard gold closed at Rs 6105 and pure gold at Rs 6140 on Friday. Despite intra-week loss, both gold posted gains over last Friday's Rs 6080 and Rs 6120, respectively.

Precious white metal silver treaded the gold tend and zoomed up to Rs 9135 per kilogram, sharply up from last Friday's Rs 9010 before settling lower at Rs 9105.

The gold futures markets moved the same way, with National Multi Commodity Exchange (NMCE) December contract being done at Rs 6067 with a volume of 32 contracts. December contract positions were shifted to January futures at Rs 6092 from last Friday's Rs 6042.

February gold futures rose marginally from Rs 6094 to Rs 6109 during the week. March futures gained from Rs 6050 to Rs 6125. On expiry of December contract, a new April contract was opened at Rs 6075 on December 16th, closing at Rs 6110 with just 8 trades.

On Multi Commodity Exchange (MCX), February gold futures rose from last Friday's Rs 6073 to today's close of Rs 6098. Gold February mini futures strengthened from Rs 6065 to Rs 6100.

Other gold contracts in April and August witnessed sporadic trading. Silver January futures gained from Rs 8791 to Rs 8870 Thursday. There was no trading in the contract Friday. National Commodity and Derivatives Exchange (NCDEX) went live Monday and kicked off trading in gold and silver futures.

In international markets, gold traders in London fixed a recommended price of US$408.75 bid per troy ounce at midmorning, up from US$407.80 on Thursday.

In Zurich the bid price was US$408.05, unchanged from US$408.05 Thursday.

Gold fell US$1.10 in Hong Kong to US$409.85 while silver opened in London at US$5.68 bid per troy ounce, up from US$5.61. Euro was quoted at US$1.2402 at midmorning, up from Thursday's closing US$1.2374 and up from Wednesday's record closing of US$1.2381.

Comex Feb gold futures were called to open 40 cents per ounce lower Friday after a largely flat showing by the U.S. dollar overnight prompted further mild fund profit taking in bullion. According to agency reports the U.S. dollar remained generally weak throughout the overnight session. Bargain hunters remained at hand to limit spot gold's losses and keep prices propped above the $408-per-ounce level.

Comex Feb gold was expected to find support around $408 as well, especially with that level being reinforced by the 10-day moving average.

The threat of week- and year-end profit taking among the speculative community remained in place, especially as the equity markets were in strong form. Analysts said that downside targets for Feb futures include $405, $402-$403 and $400 should the $408 support zone be lost if such selling emerge.

February settled at $411.10 Thursday, down $1.60. March silver was seen opening around 2 cents lower in line with gold, and was seen largely following gold's lead through the day. Support was seen around $5.70, $5.68 and $5.66 initially.

March settled at $5.728 Thursday, up $0.020. Comex gold warehouse stocks fell 272 ounces Thursday to 3,062,645 ounces, while silver stocks were unchanged at 124,458,598 ounces.