Comex Gold Future

Gold futures are trading flat in Asia electronic trades today post the damaging hurricane Sandy which left more than 35 dead, millions without power, and cities and towns flooded.

Sandy’s storm surge neared 14 feet, driving water into the still-open construction pit at the World Trade Center and flooding parts of the New York subway system. President Barack Obama declared a major disaster in New York and Long Island.

Asian shares advanced on Wednesday, with investors eyeing local earnings results and the impact from super storm Sandy in the U.S. Japan’s Nikkei Stock Average advanced 1% after losing 1% in the previous session. South Korea’s Kospi rose 0.7%, and Australia’s S&P/ASX 200 index also gained 0.7%. In China, Hong Kong’s Hang Seng Index climbed 0.6%, but the Shanghai Composite Index slipped 0.2%.

U.S. markets remained closed Tuesday for the second day after storm system Sandy brought widespread flooding and power outages to New York City, among other places.

Yesterday, Bank of Japan announced near the close of trading that it would expand its asset-buying program by ¥11 trillion to a total of ¥91 trillion. But the Bank of Japan also introduced a new lending facility to stimulate bank loans and issued an unprecedented joint statement with the Finance Ministry, highlighting its commitment to fighting deflation.

COMEX December gold futures are trading up 2 cents at $ 1712.3 per ounce in Asia electronic trades today. Yesterday, it advanced $3.40, or 0.2%, to settle $1,712.10 an ounce.

Floor trading remained closed Tuesday on the New York Mercantile Exchange after Hurricane Sandy triggered an evacuation order Monday. Metals futures prices settled at their usual times.

MCX December gold futures may open today’s session near Rs 31090 levels with resistance near Rs 31140 levels.

MCX Gold News

China Buying Up Australian Gold:

Gold has jumped past coal as Australia’s 2nd most beneficial physical export to China, with revenue up a whopping 900% for your first eight months of the year, bringing in $4.1 billion. Chinese purchasers are hoarding Gold Bullion amid a slowing economic climate, property-buying restrictions and uncertain monetary markets as its central financial institution raises its holdings. The unparalleled jump in gold revenue, together with ongoing acceleration of export revenues for other commodities led by coal, up 80% to $4 billion, caused total exports to China to increase by 10.7% for the 12 months to August, based on Australian Bureau of Statistics figures.

COMEX Gold Updates

COMEX Gold futures yet again slipped towards their one month lows of $1715 per ounce as the selling pressure stayed in place amid mixed undertone in global equities and strength in US dollar. The greenback is quoting in a positive manner after losing slightly yesterday and neared 1.3000 levels against the Euro yet again today. The currency had slipped after a local election in Spain saw Spanish Prime Minister Mariano Rajoy's party holding on to power in his home region of Galicia. The greenback had neared 1.3100 levels before this news hit the streets. COMEX Gold futures for December are quoting at $1720.45, down $5.85 per ounce on the day.

Global markets shriveled yesterday on world economic worries. The Japanese exports tumbled by 10.3% in the year to September, recording a drop for fourth consecutive month. This was the biggest drop in the measure for nearly 18 months. This hurt the sentiments on worries that the global economy is extending its weak run and demand for copper might slow in near term.

Further, the German central bank stated that there are increasing signs that a perceptible expansion of economic growth in the third quarter of 2012 will be followed by stagnation or even a slight decrease in gross domestic product in the final quarter of the year. In the final quarter of 2012, the German growth is likely to slow substantially as economic weakness in a number of Eurozone countries puts the brakes on growth.

Gold has been hit hard in the last few days as highs near $1800 per ounce proved unsustainable and weak Chinese demand hurt the sentiments. Mainland Chinese imports of gold from Hong Kong slowed dramatically in August. Hong Kong shipments of the metal to Mainland China for the month totaled 54 tons, a drop of 29% from the 76 tons shipped in July, according to data from the Hong Kong Census and Statistics Department.

COMEX Gold has dropped nearly 80 dollars in last two and half weeks and could witness some buying at the present levels. The local MCXGold futures are trading at Rs 30979, down Rs 89 per 10 grams on the day. Prices had dropped more than Rs 200 on the day yesterday. The counter has been witnessing a persistent rise in the open interest, which is up 4.64% on the day so far today.

Gold Updates

Gold futures tumbled below $1750 an ounce in early European session today as the US dollar strengthened thus pressurizing the dollar denominated assets.

Improved U.S. data and optimism over developments in Europe this week have helped to boost the dollar and euro against the yen. The ICE dollar index, which measures the greenback against a basket of six other major currencies, rose to 79.147, up from 79.022 in late North American trade Wednesday, helping cap gains.

An ounce of gold on COMEX division of New York Mercantile Exchange is trading down $5.3 at $ 1747.7 in early London trades.

Domestic gold futures for December delivery are trading flat at Rs 31142 per 10 grams on the Multi Commodity Exchange. It opened higher at Rs 31,171 per 10 grams on Thursday against the previous close of Rs 31,140. The depreciating rupee will limit any sharp fall in gold prices during the day.

The traders are suggested to sell the counter only on break of Rs 31115 with target of Rs 31070 and Rs 31010 with stop loss of Rs 31140.

On the data front today, it showed that Australia's economy has been hit by weaker commodity prices this year, but recent interest rate cuts should soften the blow, a top executive at the country's Treasury department said Thursday. Slowing growth in China, the country's biggest trading partner, has led to sharp falls in key industrial commodity prices in recent times, buffeting Australian exports. The RBA has cut interest rates by 1.5 percentage points since November, with financial markets expecting more to come over the next year as the economy slows and unemployment rises.

Also, China gross domestic product grew 7.4% in the third quarter, marking the lowest level since early 2009. But along with the GDP figures, industrial output for September rose 9.2% year-on-year, accelerating from 8.9% in August, while retail sales gained 14.2%, up from August’s 13.2%.

Gold Updates

Gold futures tumble under $1750 levels in early Asia electronic session now as the Euro hit a one-month high against the U.S. dollar yesterday behind ratings firm Moody’s Investors Service held Spain’s rating a mark above junk grade.

MCX Gold  December delivery is trading down 1.7 at $ 1751.3 per small amount on the Comex distribution of the New York commercial Exchange. Yesterday, it raised $6.7, or 0.4%, to end at $1,753 an small amount.

The frost dollar index, which measures the greenback against a holder of six other currencies, fell by almost 0.4% on Wednesday. Late Tuesday, Moody’s confirmed its rating on Spain, though still with a negative outlook, even as a lower had been long awaited. That offered some relief to Spanish bonds and stocks, lifting global stock market.

The mcx data releases showed that the weekly MBA credit Index showed a 4.2% decrease in new mortgage applications during the past week. This follows last week's 1.2% refuse.

individually, housing starts hit an annualized rate of 872,000 units during September. Market had expected for housing starts to hit an annual rate closer to 815,000. As for building permits, they increased from the prior month's rate of 801,000 to 894,000 for September. That is above the pace of 815,000 building permits that had been expected.

MCX December gold futures may open today’s session near Rs 31120 levels with support around Rs 31080 and Rs 31020 levels. Yesterday, it closed higher by Rs 100 (0.32%) at Rs 31,140 per ten grams. Prices rose to a high of Rs 31,163 per 10 grams and fell to a low of Rs 31,041 per 10 grams during the day's trading.

USD Economic Buzz

Brent futures held steady near USD 114 on Wednesday as expectations Europe's financial crisis is on the mend renewed hopes of a revival in oil demand growth, while simmering tension in the Middle East provided additional support.

Asian shares, the euro, base metals and gold all rose after Moody's Investors Service affirmed its investment grade rating on Spain, helping ease investor worries of a worsening crisis in the region. Oil was also supported by supply concerns as the European Union slapped fresh sanctions on Iran.

Brent slipped 12 cents to USD 113.88 a barrel by 0432 GMT. The November contract, which expired on Tuesday, went off the board 73 cents lower at USD 115.07, while the December one settled 40 cents lower at USD 114.00. US oil gained 18 cents to $92.27.

"We are seeing prices react to the investment grade news for Spain, but the demand outlook continues to look weak because of the global economic condition," said Victor Shum, managing director at IHS Purvin and Gertz in Singapore. "Prices are drawing support from supply concerns in the Middle East."

European Union governments imposed sanctions against major Iranian state companies in the oil and gas industry and strengthened restrictions on the central bank.

More than 30 firms and institutions were listed in the EU's Official Journal as targets for asset freezes in the EU, including the National Iranian Oil Company (NIOC), a large crude exporter, and the National Iranian Tanker Company (NITC).

The United States and the European Union are putting pressure on Iran to stop its disputed nuclear programme, while Tehran says it needs the technology to generate electricity.

Gold Updates

Gold is a natural hedge against sure shot future Inflation in an era of ultra-loose monetary policy. Comex Gold and Silver declined after a US economic data report showed a sharp decline in weekly U.S. jobless claims & late Wednesday news that the Standard & Poor’s ratings agency downgraded Spain’s credit rating to near junk status. The Euro currency sold off and the US dollar index rallied in the immediate aftermath of that news. The S & P move was a bit surprising to the market place, but not really a significant shocker to change the overall perception of Spain’s financial condition or the overall EU debt crisis. This in fact bolsters ideas that Spain will seek further bailout funds from the EU sooner rather than later. Labor Department figures showed yesterday initial applications for U.S. jobless benefits fell 30,000 to total 339,000 in the week ended Oct. 6, the fewest in more than four years. Reports also indicate that Indian demand for gold exchange traded funds – Gold ETF’s was at a record high in September, despite weak retail sales of gold jewelry in the country. Some heightened Middle East tensions supported Crude Oil, and did offset a bearish U.S. weekly DOE storage report. The open-ended nature of the QE3 promises Higher Inflation & that in turn promises for higher Gold Prices. With a lot of political manipulations coming into play now, a fresh rally in Gold seems to occur only closer to or post the U.S. elections now. Any news of fresh Bailout packages for Greece or Spain may trigger some movements, though even that seems possible only close to the month end or by early November. Any decline in Gold may be erratic and uneven as it is more susceptible to easing policies and less vulnerable to slowing growth concerns compared to other commodity movements. Gold will also garner huge support on all declines as Inflation seems absolutely unavoidable on the back of a limitless QE3. Inflation rise is now only a matter of time & Gold the only natural hedge. The central bank Gold purchases are expected to continue, especially by emerging market central banks who are looking to diversify their foreign exchange holdings. Rating agency Standard & Poor’s downgraded Spain’s credit rating by two levels, and now the country’s rating is only one notch above junk level. There is a greater chance that Spain will ask for financial aid and of the ECB having to make good on its promise to buy Spanish government bonds. This will push the Euro up & in turn trigger a rally in Gold prices.