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Gold Technically Market is Getting Support at 29120

Gold Technically Market is Getting Support at 29120

Gold on MCX settled down -0.29% at 29366 down slightly from Monday’s 2-week high as unable to extend recent gains amid uncertainty over the Fed’s rate hike report.

Federal Reserve Chair Janet Yellen gave conflicting signals about whether the central bank will tighten this summer despite a dismal U.S. jobs report. Meanwhile, Federal Reserve Bank of St. Louis President James Bullard said he is not in support of a June rate hike given the troublesome jobs data. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which the metal is priced.

After sliding 6 percent in May after Fed officials struck a more hawkish tone on rates, gold has risen about 2.4 percent so far this month as expectations for a summer rate rise faded. Gold, which is not attached to interest rates, struggles to compete with high-yield bearing assets in rising rate environments.

Meanwhile China took a break from adding bullion to reserves in May after prices soared 22 percent in the first four months of the year. Holdings had expanded 9% since the start of July to 58.14 million ounces, according to central bank data.

After its best start to the year since 1986, bullion was volatile in May, rising above $1,300 an ounce for a short while before dropping briefly below $1,200, amid changing expectations over the timing of the next Fed increase in interest rates. Overall, prices now are holding gains of 17 percent this year. Also Holdings in the world’s largest gold-backed etf fell slightly on Monday.

Technically market is getting support at 29120 and below same could see a test of 29059 level, and resistance is now likely to be seen at 29484, a move above could see prices testing 29601.

About Anil Yadav

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