Gold Gained as the Dollar Softened and US Real Yields Plunged

  • Commodities Analysis

Gold yesterday settled up by 0.24% at 47573 as the dollar softened and U.S. real yields plunged to a record low, though gains were kept in check on investor caution ahead of a Federal Reserve policy meeting that could provide details on the tapering of asset purchase. Providing a further boost to the metal, the yield on 10-year Treasury inflation-protected securities hit a record low of -1.147%. China's net gold imports via Hong Kong jumped 41.8% in June from the previous month, Hong Kong Census and Statistics Department data showed. Net imports stood at 30.887 tonnes in June compared with 21.781 tonnes in May, the data showed. Total gold imports via Hong Kong rose to 37.226 tonnes from 26.684 tonnes.  
 
Gold imports, which have a bearing on the country's current account deficit, jumped multi-fold to USD 7.9 billion during the April-June 2021 quarter due to the low base effect in the wake of the COVID-19 pandemic, according to data from the Commerce Ministry. Imports of the yellow metal had plunged to USD 688 million in the corresponding period last year, the data showed. Silver imports, however, dipped by 93.7 percent to USD 39.4 million. In volume terms, the country imports 800-900 tonnes of gold annually.  
 
Technically market is under short covering as the market has witnessed a drop in open interest by -16.4% to settled at 4064 while prices are up 112 rupees, now Gold is getting support at 47412 and below same could see a test of 47252 levels, and resistance is now likely to be seen at 47687, a move above could see prices testing 47802.  

Trading Ideas:
# Gold trading range for the day is 47252-47802.
# Gold ticked up as the dollar softened and U.S. real yields plunged to a record low
# Though gains were kept in check on investor caution ahead of a Federal Reserve policy meeting that could provide details on the tapering of asset purchase.
# Providing a further boost to the metal, the yield on 10-year Treasury inflation-protected securities hit a record low of -1.147%.

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