Gold reached two months high last night as the traders were still cautious about the long term prospects of the economies. Dollar weak moves against the EURO acted as a support to enhance the movements in yellow metal.

Dollar continued to go down versus other main currencies, which is considered the most important force pushing gold much higher. By the end of gold floor trading time, the rate against euro fell sharply to the 5-month low of 1.3788 dollars. The dollar was also much lower against the British pound and the Japanese yen.

Oil prices hit a 6-month high on Wednesday with the July contract gaining about 1.5 dollars to 61.60 dollars a barrel for gold’s session after a report showed U.S. crude inventories dropped 2.1 million barrels and gasoline inventories fell 4.3 million barrels for the second straight week.

According to figures by World Gold Council (WGC) in its Q1’09 Gold Demand Trends report, identifiable investment demand for gold was the major source of growth in the quarter, reaching 596 tonnes, up 248% from Q1 08.

Gold for June delivery rose $10.70, or 1.2%, to end at $937.40 an ounce on New York Mercantile Exchange, the highest level since March 26. MCX Gold June expiry also rose by a marginal Rs 12 to close the day at Rs 14333 per 10 grams. The prices are likely to move higher with Resistances remaining at Rs 14400. Supports for the contract are at 14261.

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Rise in Rupee has once again proved to be a spoil sport in metals on MCX. The prices of Copper only showed modest recovery even after COMEX Copper touched a one week high. Rise in Dollar supported the moves in COMEX however Rupee strengthening caused Copper to remain in corner all through the day.

MCX benchmark contract for Copper closed the trading at Rs 221.65 per kg up Rs 2. Copper for July delivery on the COMEX division rose 3.70 cents, or 1.8 percent, to close at $2.1065 a lb. LME Copper three month forward was at $ 4642 per tonne.

LME stockpiles registered yet another fall in Copper. Copper stocks were down 7,350 tonnes to 341,475 tonnes.

The formidable rally in prices of Copper in early months is expected to bring some lull in the Chinese state reserve’s bureau buying.

Popularity: 63% [?]

Popularity: 49% [?]

Popularity: 57% [?]

Gold prices were expected to correct amid the stabilizing equity markets but the expectations were shattered by the weak housing start numbers from the US. Yellow metal got formidable supports and rose by $ 5 to close at $ 926.70 per ounce on the Comex division of NYMEX. Weakness in Dollar against the majors aided the rise.

MCX Gold June expiry also gained significantly from the lows. Gold closed at Rs 14321 per 10 grams up Rs 115. The prices were once trading at Rs 13121.

Strong supports at lower levels will benefit Gold prices today as well, and the prices are expected to rise towards Rs 14500 per 10 grams.

The Commerce Department said housing starts fell 12.8 percent to an annual rate of 458,000 units last month, the lowest since records began in January 1959.

Popularity: 42% [?]