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Gold prices rebounded after three weeks’ fall on a softer dollar as the bets of early monetary tightening was countervailed. Fed Chair Jerome Powell’s said last week that the central bank will take a patient approach on monetary tightening.

Global Economy

* Global equities gained last week after recent dips. US Dow Jones index gained 3.44 percent. Key European and Asian equity gauges were also gained last week.

* US GDP grew by 6.4 percent in the first quarter, as the final estimate showed.

* Bank of England Chief Economist Andy Haldane said the central bank's new forecast that inflation will breach 3 percent and price pressure could accelerate in 2022 as well .

* Euro Zone business activity has surged in June at its fastest pace in 15 years.

* US Personal spending was unchanged in May 2021, following an upwardly revised 0.9 percent growth in April

Currencies

* US dollar eased last week from two month high by 0.41 percent and settled below 91.851 marks against it’s rivals.

* Euro up by 0.62 percent against dollar. Chinese Yuan ticked down by 0.03 percent, Japanese Yen ticked lower by 0.52 percent against the US Dollar.

* Indian Rupee eased last week by 0.15 percent against US dollar.

Gold

* LBMA spot gold gained 0.96 percent, COMEX gold futures gained 0.49 percent in the last week.

* MCX gold futures prices gained 0.42 percent during last week.

* The SPDR gold backed ETFs physical holdings was merely steady so far June from previous month.

Gold perked up from 7-week low

Gold prices perked up after weekly fall witnessed in mid-June on a sharp rebound in US dollar. But, whereas in a wider picture, precious yellow metal seemed to have traded ideally above $1700 an ounce since third quarter of 2020 except a few short peeks in March 2021. Hawkish signals from US Federal Reserves had weighed prices in the recent weeks. However, prevailing concerns on employment situations in US, and the need of prolonged monetary support to the global economy underpinned gold prices in major platforms.

Gold prices rebounded last week

The LBMA spot gold gained 0.96 percent to USD1780.34 an ounce in the last week. In the meantime, India’s domestic Mumbai spot gold ticked up 0.04 percent to Rs.47300 per 10 grams. COMEX gold futures gained 0.49 percent and closed at USD1776.60 an ounce last week. MCX gold futures gained by 0.42 percent in the last week and closed at Rs.46925 per 10 grams.

US Dollar steadied after reviving from monthly lows

The US dollar revived from near January lows on Fed’s hawkish signals in the June month’s FOMC meeting. A solid revival in US dollar against its peers pressured gold as it became expensive for the holders of other currency. Meanwhile, a stagnant US consumer spending data last week tempered bets for early monetary policy tightening by Fed, setting gold prices on track for its first weekly gain in four.

Gold ETF inflows catch up to gold price strength - World Gold Council

Global gold ETFs added 61.3 tonnes equivalent of USD3.4 billion, or 1.7% Asset Under Management in May, reversing three straight months of net outflows. This to be largely a function of investment demand increasing with the price strength of gold, along with renewed inflation concerns in the market, a weaker dollar and lower real yields. Global assets under management stand at 3,628 tonnes equivalent of USD222 billion. The total AUM is now only 9% shy of the August 2020 high of USD240billion and 7% shy of the October 2020 tonnage high of 3,908 billion.

SPDR ETF holdings was merely steady in June

The SPDR gold backed ETFs physical holdings seen moderate with only a 0.03 percent outflows in June after a 2.57 percent increase in May. The total physical holdings with SPDR is around 33.52 million troy ounces in the week ended June 26.

Money Mangers trim net longs in COMEX Gold F&O

The hedge funds and money managers reduced their bullish positions and increased bearish positions in COMEX gold contracts in the week ended June 26, and the net longs in gold contracts declined.—U.S. Commodity Futures Trading Commission (CFTC).

Outlook

International Gold:

since its key fundamentals remain put pressure on prices, medium term outlook of gold likely to be choppy with limited upside. Signs of increased global economic optimism, performance of US dollar and steady global equities continue to weigh down the sentiment. Meanwhile, gold’s special appeals like inflation hedge asset, offering portfolio diversification and it is considered safe during currency devaluation likely to limit major liquidation in prices.

Domestic Gold: Prices remain volatile but a weak domestic currency likely to offer stiff downside support.

Technical View: London Spot: Inability to move past $1800 there are chances of continuation of selling pressure. Anyhow it required to break $1745 to trigger further liquidation pressure in the counter.

MCX: If the support of Rs 46200 remain hold, expect a slight recovery in prices. Else, expect weakness with short term bearish signal.

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