Gold prices eased of subdued safe haven demand - Geojit Financial
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Gold prices eased of subdued safe haven demand. Steady US dollar, surge in US Treasury yields and outflows in gold backed ETFs pressured the precious metal.
Global Economy
* Most equity gauges gained last week. US Dow Jones index gained 1.22 percent. Most European peers gained as well. Among Asian equity gauges, India’s Sensex gained 2.20 percent, China’s SSE composite index gained 0.67 percent, while Japan NIKKIE shed 2.51 percent.
* US economy added a 194,000 jobs in non-farm sector in September, the lowest so far this year.
* US Unemployment rate dropped to 4.8 percent in September from 5.2 percent in August.
* US Treasury yields hit multi-month highs on a weaker than expected job growth in September.
Gold
* LBMA spot gold fell 0.21 percent, COMEX gold futures eased 0.04 percent in the last week.
* MCX gold futures prices shed 1.62 percent during last week.
* Global gold backed ETFs extended decline in September with a net outflows of 15.2 tonnes, or by USD830 million - World Gold Council
Technical Outlook
International Gold: Easing safe haven appeal continues to dampen the bullish outlook of the metal. Optimism over the global economic growth outlook, firm U.S dollar and stable global equities prompted investors to rely on risky assets. A moderate physical demand and expectations of central banks’ may taper its quantitative measures soon, also weighted down the sentiment. Meanwhile, recent feeble economic releases from the U.S and China may limit major rallies in the counter.
Domestic Gold: Though weak overseas sentiments limiting major rallies in prices a weak INR likely to support prices in the immediate run.
Technical View: London Spot: Expect a choppy trade inside $1670-1800 levels and breaking any of the sides would suggest a medium term direction for the commodity.
MCX: Prices need to break and sustain above Rs 47500 to continue rallies. Else, there are chances of choppy trading in the immediate run.
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