Bullion retreat as China impose ban on illegal exchanges

 Gold futures Thursday traded below 27000 down almost 1% and Silver below 50000 down more then 1.5% on MCX due to falling industrial output in Japan, seasonally low jewelry demand in Indian – the world’s No.1 gold buying nation – and also a new edict from the People’s Bank of China order the closure of all Gold Trading platforms and services outside the Shanghai Gold Exchange and Shanghai Futures Exchange, which as it notes are approved by the State Council which is the world’s No.2 gold consuming country.

Now today investors would be concerned with Italian debt auction and the fragility of the European Union’s debt crisis in general. It has become apparent with the low volume that many precious metals traders have packed it in until the first of the year. With light volume and high volatility the reaction to economic data will be generally more over done as it was today.

Silver market continues to come under pressure from investment long- liqidation with more traders focusing on moving money to other sectors irrespective to global economics. Silver posted almost 6% sell of from tuesday informed Rushabh Mehta, analyst with Commodity Online.

The situation with Iran continues to heat up as the Iranian navy continues to use the Strait of Hormuz to conduct its military exercises. The U.S warned Iran Wednesday that it will not tolerate any disruption of naval traffic through the Strait of Hormuz, after Iran’s naval chief said it is capable of closing the vital oil route if the West imposes new sanctions targeting Tehran’s oil exports.

Mehta is Metals analyst with www.commodityonline.com

Posted by admin on Dec 29 2011. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry