Prices of US gold futures surged to a new high of 7 weeks in early European trade on Monday amid severe losses in global equity markets as funds fled bullion due to weak sentiment in other class assets and the USD spurred demand for the yellow metal.
Gold futures for December delivery on the Comex gained to an intraday high $1,169.50 a troy ounce, the most since July 7, before quoted at $1,165.10 during in early European hours.
The Shanghai Composite fell nearly 9% on Monday, the biggest one-day drop since February 2007, the disappointment of investors that Beijing failed to deploying new measures on the weekend to support stocks after markets were down 11% last week.
Chinese stocks had been under heavy selling pressure the last few weeks amid concerns about the downturn and China’s concerns that Beijing would let the yuan continues to depreciate.
Indian benchmark BSE Sensex closes at 25,741.56 points, down 1,624.51, or 5.94%; European, Germany’s DAX fell more than 7%, the French CAC 40 fell 8%, while London FTSE 100 fell 6%
Because of the threat of rising interest rates the Fed is resulting in a fall in the dollar versus gold it has not capitalized feeling. Still, the money recovered through selling in the equity market will come in gold is unlikely to be a steady flow.
Meanwhile, in the US, the Dow Jones, S & P 500 and the Nasdaq Composite all fell more than 7% following the opening, as fears of the global outlook led by China, frightened traders and jolted sentiment.
The rupee on Monday weakened 1.23% against the US dollar—the lowest level in 2 years.. There is also little support to gold in the international market.
With a gain of 0.25 percent on MCX gold is trading around Rs 27,300.
Standard gold in Mumbai’s popular Zaveri Bazaar closed with a gain of Rs 235 at Rs 27,535 per 10 gms on Monday.
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