MUMBAI: After declining towards key support levels on Thursday, gold and crude oil rebounded on the back of a rally in US stock market. While tra
ders await release of key economic data, prices continued to trade higher in early Asian session on Friday.
International benchmark gold December futures on COMEX (commodities division of New York Mercantile Exchange) was nearly 3 per cent higher while crude oil December contract closed gaining over $3 from an intraday low of $54.67 per barrel on Thursday.
Domestic futures on MCX also gained nearly 2 per cent today.
“While global data releases continue to picture a bearish scenario, significant rally in US stock market ahead of the G-20 meet this weekend could support prices at near term bottoms,” said Praveen Singh, research analyst, Sharekhan Commodities.
According to him, $700-695 an ounce is a strong support range for international gold prices while $55 a barrel could act as a short term bottom for crude oil prices.
Markets await the outcome of Group of 20 Nations’ summit scheduled to start today that is expected to center around solving the credit crisis.
The rally in prices was also backed by a pull-back in Dollar index--a measure of strength of the greenback against a basket of major currencies--which lost nearly 1 percent after reaching a thirty month high of 87.65 on Thursday.
Traders also await release of Eurozone GDP numbers for third quarter as well as US retail sales for the month of October.
According to Harish Gallipeli, research head, Karvy Comtrade, the wide swing in US stocks t on Thursday (from a fall of 300 points to a gain of 550 at close for the Dow Jones Industrial Average) reflect the resilience in traders' confidence ahead of the G-20 summit.
“While gold can continue to trade in $700-750 range, the rebound in crude oil indicates that market may have gained momentum on the back of bargain buying for a possible move towards $62,” he added.
The G-20 is a group of the world's largest national economies that play economically influential and strategically important role in world developments.
