After falling five of the last six trading sessions, MCX gold has given up all of its gains for 2012, settling at its lowest price of the year. With financial turmoil in the euro zone and global growth slowing, market watchers are starting to ask, what is driving the price of gold lower? More Information about free mcx tips visit my site

"MCX Gold down to USD 1,563. MCX Gold bugs hiding deep in their gold caves pondering why gold isn't rallying in spite of sharp spike in risk-off sentiment."

When financials systems are stressed, money tends to flow to "safe havens" which for some investors, includes MCX gold. The reality, however has been different�"money has been moving into the "safe haven" of the US dollar and away from commodities including, MCX gold.

Investors hunkering down in “risk off” mode are focused on two main themes"the deteriorating economic situation in the euro zone and the trading fiasco at JPMorgan Chase.

Analysts are writing reports with titles such as, "What if the euro zone falls apart?" and asking what other surprises might be lurking"did other banks put on trades similar to JPMorgan"are there other bad bets waiting to be announced?

Below the market, Grady sees support near USD 1,524 an ounce but has his eye on two potential catalysts: demand from China and Fed Chairman Ben Bernanke. Grady says that any talk of another round of easing aka QE3 could keep interest rates low and put a fire under the price of gold adding, the growing number of "shorts" in August MCX gold futures means that any turn to the upside could be “fast and furious."

Barclays commodities analyst Suki Cooper paints a similar picture and writes,"Although our base case is for Greece to remain within the EUR, the strength of the USD has further hindered gold as it behaves in line with risky assets and US treasuries benefit instead. The responsive physical buying that materialised last year from key markets "India and China"has become lacklustre."

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