Gold stays weak while dollar sails high
Gold prices are expected to remain weak in the near term on risk aversion and strength of US Dollar against major currencies.
At Comex Gold August Futures have fallen to $1571 an ounce on Thursday trade as Federal Reserve looks unlikely to launch the third round of monetary easing to shore up growth. The dollar stood close to a two-year high against a basket of major currencies pushing the euro to a two-year low after minutes from a Federal Reserve meeting dashed hopes of policy easing moves anytime soon
“The greenback and bullion typically move in opposite directions and lately the dollar has trumped gold as the preferred safe-haven bet”
Gold touched a high of $1582.80/oz and closed at $1576.29/oz in yesterday’s trading session. On the MCX, Gold August contract however, declined 0.6 percent and closed at Rs.29,265/10 gms after touching a low of Rs 29,225/10 gms on Wednesday.
Depreciation in the Indian Rupee cushioned prices from falling further in the domestic market.
According to HY markets report, Stochastics and the RSI are bearish signalling that sideways to lower prices are possible nearterm. If it renews the decline off June's high, May's low crossing is the next downside target. If it renews the rally off June's low, June's high crossing is the next upside target.