Quote and Outlook on Gold By Mr. Abhishek Bansal, Abans Group
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Below are Quote and Outlook on Gold By Mr. Abhishek Bansal, Founder Chairman, Abans Group.
Recovery in Bond yield and Dollar index pushed gold prices down:
Gold is currently trading near 1859, sharply lower from the recent high of 1919.20 registered on June 1 on the backdrop of strength in the dollar index and recovery in global bond yields. US dollar index has recovered in the last two days, now trading near 90.49 which is sharply higher from the recent low of 89.54 registered on May 25th while the US 10 years bond yield recovered to 1.464 from the recent low of 1.428 registered on Friday.
On the economic data front, the preliminary-June University of Michigan US consumer sentiment index rose by +3.5 points to 86.4, which was stronger than expectations for a +1.3 point increase to 84.2. On a 3-month annualized basis, the headline May CPI rose by +8.4%, and the core CPI rose by +8.3%.
On a year-on-year basis, the May core CPI rose by +3.8% y/y, the largest increase in 29 years. A rise in inflation is likely to affect the US fed decision to unwind some of the covid-19 related liquidity from the markets and it is negative for gold prices.
According to the CFTC Commitments of Traders report for the week ended June 8, net long for gold futures slipped by 4314 contracts to 209387 for the week. Speculative long position dropped by 45 contracts, while shorts were added by 4269 contracts.
Gold prices are likely to face stiff resistance near $1876-$1882, while immediate support level is seen around 50 days EMA at $1848 and 200 days EMA at $1819
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