Gold Silver Reports ~ Gold on MCX settled down -0.65% at 28941 dropped tracking weakness from Comex Gold while unable to challenge a recent 13-month high near $1280 as traders booked profits after gains from last week’s dovish interest rate announcement by the Fed. The dollar arrested three weeks of declines after hawkish comments from US Fed officials renewed expectations of US interest rate hikes.
Despite recent losses, prices of the yellow metal are up nearly 16% so far this year as investors seek safe havens in the face of mounting instability in other financial markets and as fears over a China-led global economic slowdown make it tougher for the Fed to raise rates.
◊ The US central bank surprised markets last week by cutting its rate hike projections more than expected, down from four to two in 2016, citing the potential impact from weaker global growth and financial market turmoil on the U.S. economy. Investors and economists dialed back their own rate hike expectations in wake of the Fed’s surprisingly dovish outlook, with traders of interest-rate futures now seeing no rate rise before September.
◊ A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases. While holdings of gold-backed etf, continued to rise. The largest, New York-listed SPDR Gold Shares, reported an 11.9-tonne inflow on Friday, bringing its total inflow for the year to 176.6 tonnes, up from 40.8 tonnes in the same period of last year. Technically market is getting support at 28770 and below same could see a test of 28690 level, and resistance is now likely to be seen at 29080, a move above could see prices testing 29245. ~ Neal Bhai Reports