Gold Down As Dollar Rebounded After Robust US Data

  • Commodities Analysis

Gold yesterday settled down by -0.16% at 50742 as the dollar rebounded after robust U.S. data bolstered hopes of a swift global economic recovery. Data showed a sustained recovery in China's services sector and the prospect of additional U.S. stimulus whetted risk appetite. The U.S. Federal Reserve, in its "Beige Book" report, highlighted that U.S. business activity and employment ticked up through late-August, but economic growth was generally sluggish as COVID-19 hotspots hampered reopening.
 
Gold has gained about 28% so far this year, helped by ultra-loose monetary policy adopted by major central banks to mitigate the economic damage caused by the COVID-19 outbreak. Several members of the ECB's governing council were concerned that the euro's rise could weigh on European growth.
 
India's gold imports in August nearly doubled from a year ago to the highest level in eight months on an improvement in investment demand and as some jewelers restocked after New Delhi eased lockdowns, a government source said on Wednesday. The world's second-biggest consumer of the precious metal imported around 60 tonnes of gold in August, up from 32.1 tonnes a year ago, the source said.
 
Technically market is under long liquidation as market has witnessed a drop in open interest by -3.2% to settled at 13755 while prices down -79 rupees, now Gold is getting support at 50472 and below the same could see a test of 50202 levels, and resistance is now likely to be seen at 51040, a move above could see prices testing 51338.
  
Trading Ideas:
# Gold trading range for the day is 50202-51338.
# Gold prices slipped as the dollar rebounded after robust U.S. data bolstered hopes of a swift global economic recovery.
# Data showed a sustained recovery in China's services sector and the prospect of additional U.S. stimulus whetted risk appetite.
# Beige Book report highlighted that U.S. business activity and employment ticked up through late-August

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