Wednesday, 19 November 2014

Gold Stays Up On Bargain Buying

Gold futures extended the gains on bargain buying supported by reports ofRussia and Swiss Bank will be buying gold amid weak US dollar. The COMEX Gold futures gained above three weeks high of $1,200 mark on last day, after falling near $1,130 mark earlier this month. Meanwhile, Investors are looking ahead to the minutes of the Federal Reserve's October meeting, due out later in the day.

Russian President Vladimir Putin is stockpiling gold as the Kremlin looks to be digging in for a long economic war with the West. And, at the end of this month, the Swiss will hold a referendum on a partial return to the gold standard.

Over the last decade, Putin has tripled the country's reserves of gold, building up a stockpile of 1,150 tons. In the last three months, according to the World Gold Council, the country snapped up another 55 tons, making it the largest buyer in the market. Putin has turned Russia into the fifth largest holder of gold in the world, and is spending half a billion dollars a month buying more.

On Nov. 30, the Swiss will vote on a partial return to the gold standard. The proposed rule would force the Swiss National Bank to hold at least 20% of its assets in gold, which would mean it would have to repatriate gold held overseas, and probably start buying more of the stuff as well. It may well pass.

Euro currency remained supported for the second day against the US dollar after release of strong ZEW economic data for Germany and Euro Zone on last day.Euro currency quotes at $1.2540, up 0.06% on Wednesday. Meanwhile, the US dollar index quotes at $87.70, up 0.08% on Wednesday.

The COMEX Gold December delivery quotes at $1,200.90 a troy ounce, up $3.80 and Silver December delivery quotes at $16.237, up 0.063 a troy ounce.

Local gold surged on positive global cues amid weak local currency. The MCX Gold for the December delivery quotes at Rs 26774, up Rs 178. The December Silver quotes at Rs 36100, up Rs 290 per 1 kg.Indian rupee stayed lower near one month level with the currency quotes at Rs 61.980, up 0.49% over last day.

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