Gold On MCX Settled Up 0.3%

Gold on MCX settled up 0.3% at 28705 as support seen after Rupee weakened over 1.1%, its steepest fall in 21-month against the US dollar as concern over US President Donald Trump spurred a sell off in emerging market currencies. Also Comex Gold rose to a two-week high to an overnight peak of $1265, the most since May 1. Pressure on US President Donald Trump deepened after reports that he tried to interfere with a federal investigation.

This follows a turbulent week after Trump fired FBI director James Comey and discussed sensitive national security information with Russia’s foreign minister, causing investors to question whether Trump can push through tax cuts and deregulation. From physical side SPDR Gold Trust, said its holdings fell 0.14 percent to 850.71 tonnes vs 851.89 tonnes on Wednesday. In terms of ounces, holdings fell to 27,351,091.55 ounces from 27,389,151.08.

Meanwhile, a recent run of disappointing U.S. economic data, including inflation, retail sales and housing starts has also weighed on the dollar, tempering expectations for higher interest rates. Odds for a June rate hike dropped to around 60%, down from more than 80% a week ago, while odds for a second rate hike by December fell to 30% from around 50% in the preceding week.

The Fed has signaled it intends to raise rates twice more this year, after a quarter-point hike in March. Technically market is under short covering as market has witnessed drop in open interest by -14.66% to settled at 4180 while prices up 86 rupees, now Gold is getting support at 28514 and below same could see a test of 28322 level, And resistance is now likely to be seen at 28951, a move above could see prices testing 29196.

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Suhani Verma

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