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Dhaka Tribune

Gold rebounds after two sessions’ drop

Update : 17 Apr 2013, 07:12 AM

Gold futures on the COMEX division of the New York Mercantile Exchange rebounded yesterday to recoup a small portion of the more than $200 an ounce they lost in the previous two trading sessions.

The most active gold contract for June delivery rose $26.3, or 1.93%, to settle at $1,387.4 per ounce.

The bulk of the gold sell-off occurred Monday, which marked the largest one-day loss since the 1980s and prompted an increase in the amount of money investors needed to trade gold-futures contracts. Some buyers waded into the gold market Tuesday, driving prices up almost 2% by closely following a two-session loss of more than $200 an ounce, according to market analysts.

Some analysts reckon, however, the bounce was weak as goldbulls were badly shaken, and it would take some time for gold to stabilise and for buyers to regroup.

Some traders believe the near-term effect of the plunging prices of gold is that the demand for holding gold as an investment will be dampened, but it does nothing to change the long-term, fundamental reasons for gold holdings, including hedging against the infinite creation of fiat currencies.

Given that backdrop, silver for July delivery rose 26.6%, or 1.14%, to close at $23.667 per ounce.

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