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Gold spot eased last week on strengthening US dollar and on the progress in Russia - Ukraine talks that subdued safe haven appeal.

Global Economy

• Global equity gauges displayed mixed signals in the last week. US Dow Jones Index moderated while European peers settled in green turf. Among Asian peers, India’s Sensex and China’s SSE index gained while Japan's NIKKEI dipped.

• In the talks held last week, Russia promised to scale down its military operations around Kyiv and the northern Ukrainian city of Chernihiv, while Ukraine proposed neutral status with international guarantees to protect it from attack.

• US economy expanded an annualized 6.9 percent on first quarter of 2021.

• US non-farm payrolls increased by 431000 in March of 2022 pointing to a strong labour marke

Gold

• Gold prices marked a quarterly gain in the first quarter of 2022 and settled at yearly high.

• LBMA spot gold eased 1.69 percent, COMEX gold futures eased 1.78 percent in the last week.

• Global gold ETFs drew net inflows of 35.3 tonnes equivalent of USD 2.1 billion or 1.0% of asset under management in February.

Outlook

International Gold: Hopes of a ceasefire between Russia and Ukraine likely to reduce the safe haven appeal of precious metals like silver. US Federal Reserve’s decision to hike rates by 25 basis points and a strong US employment numbers also pressurising the precious white metal. A drop in long position holdings of money managers and a steady ETF flows also causing doubts on further rallies in the commodity. However, prospects of improved industrial demand amid short supply of raw material from Russia likely to dent major selling pressure in silver.

Domestic Gold: Prices remain supported by a firm overseas market and a weak Indian rupee. However, prevailing high prices likely to hit the physical demand of the commodity.

Technical View: London Spot: Consistent trades above $1960 is required to continue bullish outlook. Otherwise expect choppy trading but major downside is seen only a break of $1880.

MCX: Expect a choppy trade inside Rs 52000-50000 levels and breaking either the sides would suggest fresh direction in near future

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