Gold future climbed for the third day in a row as central banks around the globe acted jointly to provide cheaper US dollar liquidity to European banks. The immediate delivery future rose 1.83% at the COMEX and the same has been observed at MCX.
The US and European equities rose on optimism to tame the European crisis as six central banks led by the Fed agreed to cut the cost of providing dollar funding via swap deal Fed, ECB, BOJ, SNB, Bank of Canada lower rates on dollar swap lines by 50 basis points. Purpose of reducing this is to ease strains in financial markets and credit constraints.
Peoples bank of China said it will cut the Reserve ratio by 0.5% from the record level of 21.5% with effective from December 5. This move will be helping ease liquidity after previous tightening measures cooled credit growth and may have added to the risk of hard landing for China.
The Euro shot up on the same optimism to settle with near a percent gain. Holdings in the SPDR Gold Trust, the world's largest goldbacked exchange-traded slightly rose to 1298.53 tons from 1297.32 tons as on 30th Nov.
Courtesy: Karvy Commtrade Ltd.
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