Gold On MCX Settled Up 0.36%

Gold on MCX settled up 0.36% at 28094 as the U.S. dollar slid to the lowest level since November amid signs of slowing economic activity in the U.S. and following another controversy from President Donald Trump. The yellow metal notched a fourth-straight winning session on Monday after rising to its highest since May 4 at $1,237.40, following the release of underwhelming U.S. manufacturing data. Data showed that the number of housing starts and building permits issued in the U.S. unexpectedly declined in April.

The U.S. Commerce Department said that housing starts decreased by 2.6% from the month before to hit 1.172 million units last month. Meanwhile, the number of building permits issued fell 2.5% to a seasonally adjusted 1.229 million units last month from 1.260 million the month before. The disappointing data is the latest in a string of weaker than expected U.S. economic reports which saw investors temper expectations for more rate hikes by the Federal Reserve.

Markets are pricing in around a 70% chance of a hike at the Fed's June meeting, according to Fed Rate Monitor Tool, down from more than 80% in previous week. The news added to concerns that Trump will be unable to successfully push through his economic stimulus program in the face of mounting controversies.

Technically market is under short covering as market has witnessed drop in open interest by -8.01% to settled at 6119 while prices up 102 rupees, now Gold is getting support at 28031 and below same could see a test of 27968 level, And resistance is now likely to be seen at 28146, a move above could see prices testing 28198.

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Suhani Verma

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