Gold Pulls Back From Recent Highs

Hong Kong (Feb 4)   Gold futures are trading lower in the Asia electronic session today facing a pullback after it rallied by hefty $20 an ounce yesterday getting a safe haven lift on back of disappointing manufacturing data from the United States and China.

The Institute for Supply Management data showed growth in US manufacturing slowed sharply in January on the back of the biggest drop in new orders in 33 years, while growth in China's manufacturing sector slowed to a six-month low.

International gold futures for February delivery are trading down $3.1 at $ 1257.3 an ounce on the COMEX division of New York Mercantile Exchange. Yesterday, it settled up$20.10 at $1,259.90 an ounce.

China’s official nonmanufacturing Purchasing Managers’ Index, showed a fall to 53.4 in January from 54.6 in December. The Institute for Supply Management index sank to 51.3% from 56.5% in December. That’s the lowest level since last May.

Meanwhile, India’s government slashed the much awaited import duty on gold and silver. The Indian Government Monday cut the import tariff value on gold and silver to $404 per ten grams and $635 per kg, respectively, taking into account the volatility in the global prices.

Gold is the second largest import item for India after petroleum. However, gold imports are expected to decline this year as government has taken several measures to curb shipments to address the high current account deficit.

According to the jewellers body, total gold imports may decline to below 500 tonnes this fiscal due to these restrictions, from 845 tonnes in the last fiscal.

MCX gold for April delivery moved above Rs 29000 mark yesterday following the cut in import duty. It may open today’s session below Rs 29k with support around Rs 2850-750 levels.