Gold stabilized above $1700 per ounce today, though intraday moves bought some sell off for the metal. Gold shot up on Wednesday after the US Fed indicated that it will continue its very accommodative monetary policy for quite some time to come, at least through 2014. It also hints the Fed remains very concerned about the US economy's health, having a negative influence on the US dollar and helping commodity prices surge sharply. 

The yellow metal had hit almost eight-week highs yesterday. Global equity markets remained on the edge as Greek officials continued to struggle to hammer an agreement with the private bondholders. The Euro has edged to a five week high near 1.3200 against the US dollar yesterday and slipped slightly today. 

Meanwhile, the sales of new homes in the United States skidded in December, bringing to a close the worst year on record, the Commerce Department reported yesterday. The total number of homes sold during the year stood at 302,000- the lowest level in records dating to 1963. After two months on the rise, sales fell further in December, down 2.2 per cent from November, the Commerce Department noted. 

Over last couple of years, the US Federal Reserve repeatedly has blamed the depressed housing market and persistently high unemployment for holding back the economy's recovery from recession, and has moved to push down mortgage interest rates to record lows in hopes of stimulating home buying.

Nevertheless, a falling US dollar clubbed with uncertain equities could help gold extend its recent gains. The yellow metal is quoting at $1723, down $3.70 per ounce on the day. The local gold futures witnessed a fabulous upswing though, making up for the lost ground as local markets were closed yesterday on account of the Republic Day. MCX February Gold futures hit a high of Rs 28084, surging sharply in early moves. The counter slipped thereafter, as the Rupee surged to near 49 per US dollar levels. The counter currently quotes at Rs 27844, up Rs 255 or nearly 1% on the day.

Powered by Commodity Insights