By Manasee S. Gokhale
• Gold in Asia and New York was up from its earlier lows amid turmoil in the financial markets. As equities fell after the US Commerce department said gross domestic product contracted at a 6.2 percent annual pace in the fourth quarter, the fastest in
more than a quarter century, Gold gained along with the dollar.

• The SPDR Gold Trust, the biggest fund backed by bullion, held at a record 1,029.29 metric tonnes as of February 27, 2009. Holdings in the fund have increased 32 percent since the beginning of the year as investors sought safe haven assets.

• Gold in New York opened at $959.00/961.00 an ounce and rallied on the back of disastrous news of worse than expected GDP. As equities collapsed with this news, it was the metal’s time as investors rushed to buy it. But, the stock market regained
composure after a while and Gold slid lower. The metal then recovered from its lows and finally climbed higher to close at $941.00/943.00 an ounce.

• Silver in New York opened at $13.30/13.35 an ounce and climbed marginally as equity markets tumbled. The white metal traded within a range but only for a while and as investors sold the metal quickly fell. As fast as it fell, it rebounded and by the end of the trading session finished lower at $13.11/13.16 an ounce.

Global Markets: Bad bad news…
• United States is in severe doldrums and out of curiosity; it would be good to know if all the pumping in of the rescue money is going to do any good. Whether the economy has not really gone to a point of no return. February was worse than January as more jobs were hemorrhaged at an even faster clip as the world’s largest economy sank to new depths.

• Employers cut payrolls by 650,000, the most since 1949, and the jobless rate probably surged to 7.9 percent, according to the median estimates in a Bloomberg News survey ahead of Labor Department figures March 6. Other reports may show industries from manufacturing to services weakened further.

• Treasuries fell once again on continued worries over the market’s ability to absorb the massive supply of bonds due to be sold to the market in order to fund Trillion dollar deficits.

India Markets: Some good news and some bad…
• Credit Suisse, an International rating agency has come out with figures that could make Indians feel relieved, at least for sometime. According to the agency, India will be the second fastest growing economy next year with growth rate pegged at 4.9 percent for the financial year 2010 but weak government finances would be a major challenge to bond yields, growth as well as ratings.

• While there is good news about growth, the Indian rupee seems to have lost grip and tumbled well below its usual level as the first time it breached the 51 level against the dollar. Weighed down by heavy dollar demand from importers to meet month-end
commitments and a weak GDP report the rupee closed at 51.16 against the dollar from its earlier 50.48 against the dollar. Asia's third-largest economy expanded 5.3 percent in the December quarter from a year earlier, slowing sharply from the previous quarter's 7.6 percent as the global economic crisis cut demand and exports.

Manasee S. Gokhale is an Economist with the National Commodity & Derivatives Exchange, India

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