Gold finds buying at lower levels

COMEX futures hover around $950

Gold rebounded from lower levels today as some buying emerged in the mid London trades. The continuous fear over hyperinflation in the medium term once the economic recovery gathers steam continued to underpin the commodity after early setbacks. In Asia, Gold drifted sharply lower on COMEX, sliding well below $950 per ounce levels as the commodity market participants eyed the sharp rebound in the US dollar following the weakness in the economic data from the other side of Atlantic.

The First-quarter German real GDP shrank 3.8% from the fourth quarter, data from the Federal Statistics office confirmed Tuesday. The drop was in line with the flash estimate, which was published May 15. It was the sharpest decline since records began in 1970.

The familiar cues of dollar strength swung in the action to keep the yellow metal under check after the data as the US currency continued to extend its gains after hitting two-month low levels of 1.4000+ against the Euro last week. The dollar topped 1.3865 against the Euro in the London trades today. This pulled the crude oil futures down by around 2 dollars and kept the entire commodities complex under check.

COMEX Gold futures for June lost out big time in London to slip to a low of $936.6 per ounce levels. The counter currently trades at $949.80, down $9.10 from the previous close.

MCX Gold futures also slipped sharply in tandem with the global cues and slumped near Rs 14500 in the intraday moves. However, there has been an impressive recovery in the counter thereafter and the contract currently trades at Rs 14627, up Rs 39 per 10 grams.