The Hindu Business Line : Gold prices nosedive

International gold prices that peaked at $744.50 on June 6, came all the way down to $585 Monday, breaching the strong psychological mark of $600 an ounce. On the national front, the October futures contract for gold on Multi Commodities Exchange (MCX) went below Rs 9,000 per 10 gm.

According to traders, one of the factors that drove gold prices southward is the geopolitical ease over Iran's nuclear enrichment programme. This ease is a result of constructive talks amongst the officials of Europe and Iran over the Iran's nuclear dispute.

This helped ease the rising crude oil prices, which dipped to a low below $65 per barrel on the New York Mercantile Exchange. This weakness in oil prices contagiously caught onto gold.

Another important factor that contributed to the plunging gold prices was a result of breach of many crucial support levels. The breach of the strong support level at $601 may have triggered many stop losses, believes Mr Pankil Shah, Associate Director of Angel Commodities, a broking house.

More Stories on : Gold & Silver | Commodity Markets

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