Gold On MCX Settled Up 1.2% - Ways2Capital

Gold on MCX settled up 1.2% at 29567 touched their highest in more than six weeks as dollar weakened ahead of a UK national election and a European Central Bank meeting with safe haven demand seen as geopolitical tensions on rise. Traders already had been expected to favor safety plays in this action-packed week, with three events sparking worries: a ECB announcement, the U.K. general election and former FBI boss James Comey’s testimony before a Senate panel.

The panel is investigating Russian efforts to interfere in last year’s presidential race. Gold is breaking out of a six-year slump as investors search for safe havens during a period of global upheaval and bets that historically low U.S. interest rates will endure. After breaching a six-year downtrend line, gold is at the highest level since Nov. 4, and has advanced 12.7 percent this year. An uptick in bullion imports in China, as a hedge against currency risk, and a tepid pace of U.S. monetary tightening could fuel the next leg-up in the rally.

Support also seen as Global investors have also increased holdings. Assets in the SPDR Gold Trust, have climbed by more than 6 percent since the end of January to 851 tons as of June 5. While from physical market Mainland China is set to import about 1000mtns from the territory in 2017, Imports from Switzerland topped 100 tons in the first four months of the year, according to calculations on data reported by the Swiss Federal Customs Administration.

In December, China imported 158 tons from the country, taking the total for the year to 442 tons, up from 288 tons in 2015, the data show. Technically market is getting support at 29369 and below same could see a test of 29172 level, And resistance is now likely to be seen at 29674, a move above could see prices testing 29782.

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Suhani Verma

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