MCX Gold futures are trading in red in the early moves, extending their losses from the previous session as rallies prove short lived and year end profit selling takes a toll on the yellow metal after a fabulous rise in the prices during the year. The commodity is up nearly 30% from the start of the year and the a persistent bout of strength in the US dollar and a failure of the benchmark COMEX Gold futures to hold above $1400 per ounce seem to be the primary factors leading to a setback in the commodity. Prices tumbled last night in New York after an early bounce. Weak US inflation figures added to the selling pressure and the Gold prices for February delivery lost $18.10 to close at $1,386.20 an ounce on the Comex in New York. Prices ranged from $1,378.20 to $1,398.00. The US consumer price index rose just 0.1% in November, as prices for food and energy each increased 0.2%, the Labor Department said. This ensured that the inflationary expectations are well anchored despite the flush of liquidity in economy. Asian markets witnessed a subdued start today with the commodity prices dropping slightly while equities were also pressed lower. COMEX Gold futures broke under $1380 and tested a low of $1378 per ounce. The counter is currently quoting at $1383.70 per ounce, down $2.50 per ounce from the previous close. The MCX Gold futures were also a tad lower today. The benchmark February 2011 futures closed at Rs 20631 per 10 grams last night but dipped under Rs 20600 per 10 grams today. The counter trades near its days low right now, shedding Rs 68 or 0.33% to Rs 20563. Watch out for further losses if Rs 20600 levels are not overcome.

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