Gold On MCX Settled Down -0.52%

Gold on MCX settled down -0.52% at 28542 finished in negative territory as the dollar strengthened and as investors favored assets perceived as risky over so-called havens. Dollar index rose by 0.3% on Monday, providing a headwind for commodities priced in the currency. A stronger dollar tends to make assets pegged to the buck more expensive to buyers using other monetary units.

Gold prices was under pressure after hawkish comments from a top Fed official, but uncertainty created by the start of talks on the terms of Britain's departure from the EU prevented deeper losses. While New York Federal Reserve President William Dudley said US inflation is a little low but should rise alongside wages as the labor market improves, allowing the Fed to continue gradually tightening U.S. monetary policy. Meanwhile Hedge funds were smart enough to get ahead of Janet Yellen’s bad news for the gold market.

Money managers pared their net-bullish wagers in the metal for the first time in four weeks. The next day, the move was vindicated when Federal Reserve Chair Yellen raised U.S. interest rates and sparked the biggest weekly loss for gold prices in more than a month. After posting gains earlier this year, the precious metal could be heading for a turning point. Following a busy week packed with central bank meetings, market players will focus on a handful of Fed speakers in the week ahead, as they look for more clues on future monetary policy moves.

Traders will also keep an eye out on more U.S. housing data to gauge if a recent downtick in consumer spending and inflation is translating into lower home prices and slack in sales. Technically market is getting support at 28496 and below same could see a test of 28449 level, And resistance is now likely to be seen at 28620, a move above could see prices testing 28697.

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Suhani Verma

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