Gold On MCX Settled Down -0.51%

Gold on MCX settled down -0.51% at 28598 on expectations of a Federal Reserve rate hike and as the dollar extended its bull run against the yen. Bullion shed heavily this month and has lost over $160 an ounce since the peak after the U.S. election on Nov. 9, hurt by a strong dollar and surging Treasury yields as investors bet on higher growth and inflation under U.S. president-elect Trump. 

The metal has also been pressured by talks of an almost certain U.S. interest rate hike in December. Gold premiums in top consumer China jumped to the highest in nearly three years this week on worries over a supply shortage that traders said were due to Beijing's efforts to restrict import licenses.

China's net gold imports via main conduit Hong Kong fell 15 percent from a year earlier to 61.075 tonnes in October. The premiums could stay high as gold retailers and manufacturers may replenish stocks for the Chinese New Year in January, taking advantage of spot prices hitting nine-month lows. In India, the world's No. 2 gold consumer, premiums dropped due to subdued demand after the government scrapped high-value notes. Cash crunch was forcing retail consumers to trim purchases, while jewellers were waiting for prices to fall next month.

Dealers charged a premium of up to $3 over official domestic prices that include a 10 percent import tax. That compared with up to $12 an ounce last week, the highest in two years. Technically market is under long liquidation as market has witnessed drop in open interest by -6.05% to settled at 5045, now Gold is getting support at 28417 and below same could see a test of 28236 level, And resistance is now likely to be seen at 28736, a move above could see prices testing 28874.

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Suhani Verma

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