MCX Gold futures drifted lower today, relinquishing their early gains as traders eyed a firm undertone in Euro and a mega sell off in Chinese equities, which kept the risky assets under check. Gold had witnessed a bounce from lows near $1560 per ounce in the last session but the metal witnessed thin buying on rallies today, undercutting the recovery. The commodity quotes at $1578.10, up $5.80 per ounce on the day, after failing to hold onto highs above $1580 per ounce in intraday moves.
Chinese equities slumped nearly 4% today as worries pertaining to a property bubble yet again hit investor's sentiments. The stocks tumbled, after the State Council, China's cabinet, late on Friday announced restrictions, including higher down payments and mortgage rates on second homes in cities that have seen steep rises in property prices. The policy moves also include a 20% capital gains tax on existing-home sales
While this kept the Asian stocks stressed, European markets were seen getting squeezed on growth worries. The Eurostat data agency said unemployment in the 17-nation eurozone rose to a record 11.9% in January from 11.8 percent in December, with nearly 19 million people out of work.
A key manufacturing survey showed the Eurozone remained in the negative territory for a 19th consecutive month in February. The Markit Eurozone Manufacturing Purchasing Managers Index was 47.9 points in February, unchanged from January when it hit an 11-month high, albeit one still below the 50-points boom-bust line.
The Euro tested lows under 1.3000 levels against the US dollar today and is currently quoting around 1.3012 levels. Most of the commodities are witnessing thin trades given the worries triggered by Chinese measures and the Eurozone economic data and Gold could witness some more selling in evening moves. MCX Gold futures failed to hold around Rs 29800 per 10 grams and slipped under Rs 29700 levels as well. The counter trades at Rs 29661, down Rs 79 per 10 grams on the day.
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