Buoyant dollar takes sheen out of gold, silver
Precious metals have witnessed substantial losses since Monday despite a bullish outlook for the long-term, on the back of a stronger dollar ahead of the outlook for US interest rates by the Federal Reserve chairman Ben Bernanke.
By TNN |
MUMBAI: Precious metals have witnessed substantial losses since Monday despite a bullish outlook for the long-term, on the back of a stronger dollar ahead of the outlook for US interest rates by the Federal Reserve chairman Ben Bernanke.
Further, gold futures in New York saw a sharp pullback, two days in a row, as the conflict in the Middle East did not flare up as expected.
Spot gold fell 9.5% from highs of $677.5 an ounce on Monday, to hit a low of $619 on Wednesday. Silver sheds 12.3% from $11.8 an ounce to $10.47. Gold was trading at $632.9, at 9.20 am New York time. In Mumbai, standard gold (99.5) fell by Rs 570 from Monday to close at Rs 9,500 per 10 gm. Silver fell Rs 1,135 to Rs 17,160 per kg.
According to Krishna Nathani, head, research, Indiabullion.com, a rise in rates would make the dollar attractive and put pressure on gold. “Gold has seen some profit-taking. It is likely to see further support at $610.6 from the current levels. Silver, on the other hand, is steadier, and is likely to see a resistance at $11.67 and support at $10.68,” he said.
Platinum is also expected to fall from current levels of $1,206 an ounce, with first support at $1,158. Rajini Panicker, head, research, Man Financial said the consensus forecast for the Consumer Price Index (CPI) data is a 0.2% rise in both core and overall CPI in June, and even up to a 0.3% rise would keep the dollar buoyant therefore keeping precious metals under check.
ADVERTISEMENT
In the domestic futures market, gold dropped Rs 300 to Rs 9,600 per 10 gm in the August futures on the Multi Commodity Exchange (MCX). Suresh Nair, vice-president, Kotak Commodities said: “Although, there has been a steep fall, the overall trend remains bullish for gold with prices likely to remain around the Rs 10,000 levels during the upcoming festival season.”
Gold hit two-month highs of $676 on Monday with the worsening conflict between Israel and Hizbollah guerrillas triggering heavy buying in gold. However, investors booked their profits, with the dollar looking stronger.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
