MCX Gold prices clawed their way out of bear market territory Thursday as June NYMEX gold futures spiked over USD 40 to more than USD 1576 an ounce, posting the biggest one-day gain of the year. In the previous session, MCX gold plummeted to its lowest price in 10 months, dropping 20% from its all-time high above USD 1900 to a USD 1527 intraday low. Technical analysts say that low may have sparked the rally. More Information about mcx tips visit my site mcx-trade-tips.blogspot.com
"Look for buying interest near USD 1521 to underpin a near-term uptick toward the USD 1600 area," Barclays analysts wrote in a note to clients Wednesday night.
Throughout the recent sell-off, MCX gold bulls maintained the precious metal's more than decade-long rally would remain intact. MCX Gold has gained a stunning 409% in the past 10 years.
Another factor in the gold reversal may be a change in investor sentiment. Ongoing concerns about the economy seemed to have rekindled a flight to safety in MCX gold, traders say.
"There has been a reevaluation of MCX free gold now. There's a cautious flight to quality that's attracting buyers", says MCX gold options trader Anthony Neglia of Tower Trading NYC. Some traders may also be covering short positions, especially after a disappointing US manufacturing report, some traders say.
The precious metal's stunning reversal Thursday morning came after the release of a key gauge of manufacturing activity from the Philadelphia Federal Reserve, showing a surprise contraction in the Mid-Atlantic region.
"The action in MCX gold today shows the market is beginning to price in a more accommodative policy from the Federal Reserve and central bank community," Netto says. "That is why gold is rallying not only in dollars, but in British pounds and Euros as well."
Neglia also notes recent media reports that the first Japanese pension fund is now buying gold to escape sovereign risk may have encouraged more buyers to come into the MCX gold market.
"Look for buying interest near USD 1521 to underpin a near-term uptick toward the USD 1600 area," Barclays analysts wrote in a note to clients Wednesday night.
Throughout the recent sell-off, MCX gold bulls maintained the precious metal's more than decade-long rally would remain intact. MCX Gold has gained a stunning 409% in the past 10 years.
Another factor in the gold reversal may be a change in investor sentiment. Ongoing concerns about the economy seemed to have rekindled a flight to safety in MCX gold, traders say.
"There has been a reevaluation of MCX free gold now. There's a cautious flight to quality that's attracting buyers", says MCX gold options trader Anthony Neglia of Tower Trading NYC. Some traders may also be covering short positions, especially after a disappointing US manufacturing report, some traders say.
The precious metal's stunning reversal Thursday morning came after the release of a key gauge of manufacturing activity from the Philadelphia Federal Reserve, showing a surprise contraction in the Mid-Atlantic region.
"The action in MCX gold today shows the market is beginning to price in a more accommodative policy from the Federal Reserve and central bank community," Netto says. "That is why gold is rallying not only in dollars, but in British pounds and Euros as well."
Neglia also notes recent media reports that the first Japanese pension fund is now buying gold to escape sovereign risk may have encouraged more buyers to come into the MCX gold market.
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