MCX Gold Jumps Above Rs 26k

MCX gold staged a rebound of more than Rs 1000 per 10 grams after it fell below Rs 25000 per 10 grams last week sacked down by the signal from the chairman of the Federal Reserve, Ben Bernanke that he intends to cut back the US central bank's $85bn-a-month stimulus programme.
MCX August bullion futures jumped more than Rs 200 at Rs 26199 per 10 grams. The counter may face a resistance near Rs 26350 levels. COMEX August gold futures jumped more than $10 at $ 1266 an ounce today.
Last week, domestic gold prices hit a 23-month low of Rs 24830 per 10 grams on Friday 28 June 2013 on heavy selling triggered by a sharp plunge in global gold prices and on account of the strengthening of the Indian rupee. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal. It hit a high of 59.21 in intraday trade today after closing at 60.19 on Thursday.
Immediately after Bernanke announced the QE plan and gold crashed many investment banks started cutting the price forecast for the precious metal dragging it further lower. The metal plunged 6.3% in a single session last week after Fed Chairman Ben Bernanke said the U.S. central bank could start winding down its $85-billion-a-month bond-buying program later this year.
International gold prices have dropped by nearly 15% – the steepest fall in 30 years – on strength in the US dollar and on persistent worries over the U.S. Federal Reserve's plan to wind down its monetary stimulus. So far in 2013 the metal is down nearly 30%, sliding since Fed Chairman Ben Bernanke laid out a strategy to wind down the bank's $85 billion monthly bond purchases on the back of a recovering economy.
Fall in the domestic gold was far less than a near 14% fall in the international gold prices, the credit of which goes to the persistent fall in Indian Rupee. If the MCX gold would have fallen in pace with the COMEX gold then the metal would have slipped to below Rs 23500 levels.
Traders and investors are awaiting U.S. payrolls report for June, due on Friday, for a better indication of how gold and other assets would perform. A strong payrolls reading would likely signal more pressure on the Fed to reduce its stimulus, lifting Treasury yields and the dollar, and depressing gold.
Markets are also watching the European Central Bank’s policy meeting on Thursday, which is likely to emphasize that the euro zone economy is in a different stage of recovery than the United States.