Commodity World 11-06-2014 …

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MCX Gold Aug 2014

Gold settled up 0.46% at 25982 as Rupee weakened as continued dollar buying intervention by the central bank and demand for the dollar from importers offset positive sentiment. While Comex Gold hold above $1250 after U.S. jobs data matched expectations, while a rally in stocks curbed the metal’s appeal as an investment hedge. With no major economic data scheduled for Monday, markets were eyeing investment and consumer demand for further cues. The ECB’s recent decision to loosen policy coupled with expectations for the Fed to wind down stimulus programs this year reflected in bond markets on Monday, which weakened the euro and gave gold room to rise.

Last Thursday, the ECB unveiled a package of measures to battle persistently low inflation rates in the euro area, including cuts to interest rates, while solid U.S. unemployment data kept expectations firm for the Fed to wind down its monthly asset-purchasing program this year.

Expectations for an end to monetary stimulus tool s in the U.S. strengthened the dollar, which watered down gold’s gains as the dollar and the gold tend to trade inversely with one another. The dollar, meanwhile, continued to see support on solid U.S. unemployment data, which also dampened gold’s advance. India may increase gold imports as the government is likely to ease import restrictions. From the negative side, gold seems to have irrevocably lost investors’ favor as they switched to riskier assets as illustrated by equities’ rally across the globe.

Technically market is under short covering as market has witnessed drop in open interest by -3.47% to settled at 8519 while prices up 119 rupee, now Gold is getting support at 25858 and below same could see a test of 25735 level, And resistance is now likely to be seen at 26057, a move above could see prices testing 26133.

MCX Silver Jul 2014

Silver settled up 0.75% at 40297 held well above 40000 mark after U.S. jobs data matched expectations, while a rally in stocks curbed the metal’s appeal as an investment hedge. Silver ended Friday’s session almost unchanged after the U.S. nonfarm payrolls report showed that employment returned to its pre-recession peak last month. The Department of Labor reported Friday that the U.S. economy added 217k jobs last month, just under expectations for jobs growth of 218,000, while the unemployment rate remained unchanged at a 5.5year low of 6.3%.

The data underpinned dollar demand and sent U.S. equities to record highs on Friday. Gold, often seen as an investment hedge, tends to have an inverse co-relation with equities and the dollar. Trading conditions remained light due to the Whit Monday holiday in some parts of Europe, while no major economic reports were scheduled for release. While the ECB’s recent decision to loosen policy coupled with expectations for the Fed to wind down stimulus programs this year reflected in bond markets on Monday, which weakened the euro and gave gold room to rise.

Last Thursday, the ECB unveiled a package of measures to battle persistently low inflation rates in the euro area, including cuts to interest rates, while solid U.S. unemployment data kept expectations firm for the Fed to wind down its monthly asset-purchasing program this year. Also India‘s purchases of silver to taled 6,016 tonnes in 2013, a record-high, and considering the buying interest on the country’s market, imports are likely to stay strong in 2014.

Technically market is under short covering and getting support at 40062 and below same could see a test of 39826 level, And resistance is now likely to be seen at 40452, a move above could see prices testing 40606.

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