1. It is mainly the volatility that is forcing traders, speculators, importers, exporters, the hedgers to hedge their positions at this point in time and all this risk averse trading is happening on the exchange platform, which is why there is a spurt in the volumes.
2. No rate cut move by Fed and also USD 1.2 trillion mortgaged-backed bonds purchases is an indication that dollar will weaken further. Thus, the flight to safety is clearly seen towards gold. Gold contracts are seeing a trend reversal from bearish to a bullish side.
3. Hedgers and traders are closing their positions and building long positions, so that too is leading a spurt in volumes. There has been a spurt in volumes on the metal side and gold side, which is leading to increased volumes and number of contracts moving up on the commodity space.
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