Gold may open flat Monday after the dollar weakened against other currencies and as United States nonfarm payrolls data suggested that Federal Reserve could hike interest rates as early as next month, said analysts.
"Gold prices will be up on weak dollar while solid US jobs data suggesting Fed rate hike fear which will cap the prices at higher level," said Ajay Kumar Kedia an analyst with Kedia Commodities.
Prices of the yellow metal will be supported by weak dollar against other currencies which boosts inventors' appetite for dollar denominated commodities, said analysts.
At 9:30AM dollar index, which measures the strength of greenback against its six major trading partners, slipped 0.20% to 97.62.
Prices of the bullion will also be supported by hope of improvement in physical demand in China and India, the world's top yellow metal consumers, said analysts.
The value of China's gold reserves dropped to $59.24 billion from $62.4 billion.
Premiums in India hovered in range of $1.30-$2.10 an ounce over the global spot benchmark up from $1.50-$2 last week, with ample supply offsetting an improvement in demand.
India's gold imports in fiscal 2015/16 are likely to be between 900 and 1,000 tonnes as lower prices will boost demand during the festive season.
However, sharp gain in the yellow metal prices will be capped as a government data showed there is continued progress in United States jobs scenario increasing the bets of interest rate hike by the Federal Reserve in September.
US nonfarm payroll data came at 215,000 in July lower than analysts' estimates of 223,000. However, the earlier month's figures were revised upward to 231,000 from 223,000 earlier.
Meanwhile, the unemployment claims held at seven-year low of 5.3% in July.
Prices of the yellow metal will also be down on subdued investment demand following sharp drop in SPDR Gold Trust holding, said analysts.
Holdings of SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, fell to 667.69 tons on Friday compared to 667.93 tons on Thursday, its lowest level since September 2008.
On Friday, gold for October delivery at the close of trades rose 0.43% to Rs 24,895 per 10 grams on the MCX.
Gold prices rose 0.02% to $ 1,094 per ounce on the Comex exchange.
On Friday, at the closing of trades Comex gold for October delivery rose 0.32% to $1,094 per ounce on weak dollar.
MCX gold prices are likely to find support at Rs 24,588 per 10 grams while resistance is seen at Rs 25,138 per 10 grams today.
Comex gold prices are likely to find support at $1,085.60 per ounce while resistance is seen at $ 1,102.10 per ounce today.
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