Gold crushed by another $20; may recover from hereon

Gold futures crashed in the midday London after staring the day on a cheerful note. The counter slipped as traders booked profit amid surge in the European equities today. However the downbeat start in the US stock futures on the last trading session of the week and the appreciation in the Japanese yen should limit the downside for the yellow metal giving it a safe haven boost. The weakness in the Indian currency which slipped to as low as 48.91 against the greenback today is also acting as a floor for the domestic bullion prices. In the data released from US today showed that the construction of new homes dwindled to a 17-year low in September as home builders sought to reduce the number of unsold homes in an elusive quest to find the bottom of the historic housing collapse. Housing starts fell 6.3% in September to a seasonally adjusted annual rate of 817,000, the lowest since January 1991, the Commerce Department estimated Friday. Starts of single-family homes tumbled 12% to 544,000, the lowest since February 1982. Building permits fell 8.3% to 786,000, a 27-year low. Permits for single-family houses fell 3.8% to 532,000, the lowest in 26 years. The data however had very slim impact on the currencies. The dollar was virtually unchanged after the data and was quoting at 1.34 up 0.5% against the single currency and was up 0.3% versus the pound sterling. However it was lower against the Japanese Yen. COMEX Gold futures are trading down $ 19.5 at $ 785 an ounce which slipped to as low as 779 earlier in the session. The prices may rebound from here on today. Meanwhile MCX Gold December contract lost nearly Rs 350 at Rs 12442 per 10 grams. It was last seen trading at Rs 12492 per 10 grams.