MCX Gold-Gold falls as JP Morgan cuts price outlook, strong dollar and ETF outflows
Gold prices extended losses, falling for the second day on Wednesday at the domestic markets after Wall Street bank JP Morgan cut its 2013 price forecast for the precious metal. JP Morgan cut its 2013 gold price forecast to USD1,595 a troy ounce, down from a previous estimate of USD1,745. Gold futures for June 2013 contract, at MCX, were trading at Rs. 26,409 per 10 grams, down by 0.01 per cent after opening at Rs. 26,481 against the previous closing price of Rs. 26,411.
MCX Gold Facing Resistances at :26547,26663,26764
Sentiment weakened further as the holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to 1012.25 tonnes, their lowest since February 2009. Moreover, stronger greenback makes gold expensive for those holding other currencies, thus reducing demand. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, was trading 0.28 per cent higher at 84.334 on the Inter-Continental Exchange (ICE) at 11.08 am IST. However, losses in the yellow metal were curbed as physical demand for gold has picked up in India, the biggest bullion consuming nation, due to the ongoing marriage season. At the Commodity Exchange (COMEX), gold future for June 2013 delivery traded at US$1,386.5 per ounce, up by 0.55 per cent. It opened at US$1,379.9 against the previous closing price of US$1,378.9.
Indian Rupee
The Indian rupee plunged to its lower level since June 28, 2012 at commencement on Wednesday, May 29, 2013, breaching the Rs 56 per dollar mark, on strong dollar buying by domestic companies. A firm dollar overseas also weighed down rupee alongside most regional peers. The domestic currency opened weaker by almost 22 paise at 56.18 and climbed to a high of 56.09, before reversing back gains. The rupee has fallen heavily this month despite huge foreign inflows into stocks and debt amidst a global rally in the dollar and concerns about India's current account deficit. In the spot currency market, the Indian unit was last seen trading at 56.11, lower by around 15 paise or 0.26% as compared to previous close at 55.96.The US dollar gained broadly in early Asian trade on Wednesday after robust economic data boosted Treasury yields and raised expectations that the Fed may make an early exit from its easing scheme, making the greenback more attractive. The euro is still trading below 1.29 to the dollar. The dollar index is strong above the 84 mark.
Stock Market
Indian key benchmark indices reversed direction after a positive start. Asian shares were steady as U.S. stocks rallied to record highs overnight on signs of resilience in the U.S. economy and expectations of continued monetary policy support. Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 711.12 crore on Tuesday, 28 May 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was down 58.67 points or 0.29% to 20,102.15 while the CNX Nifty was down 23.55 points or 0.39% to 6,087.70.
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