Gold gains as top central banks switch to a more cautious posture for further move

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Gold gains as top central banks switch to a more cautious posture for further move
Credit: © Reuters.

Gold yesterday settled up by 0.5% at 60082 as top central banks switch to a more cautious posture about further moves in their year-long round of global monetary tightening. Data showed annual U.S. inflation rose at its slowest pace in over two years in June, cementing expectations that the Federal Reserve was closer to ending its fastest rate hiking cycle since the 1980s. 

Two European Central Bank policymakers raised the prospect of an end to its longest string of rate rises. The U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.2% last month, compared to May's increase of 0.3%. Inflation in the last 12 months rose 4.1%, down sharply from June's 4.6% increase. Annual inflation also came in a tick cooler than expected. Looking at the broader trend, inflation remains stubbornly high, roughly double the Federal Reserve's target of 2%. Chinese physical gold premiums rose to a four-month high on robust demand, while a price retreat fuelled a slight recovery in purchases in India. Premiums in top consumer China rose to $15-$22 an ounce over global prices from $9-$17 last week. Data showed China's June net gold imports via Hong Kong fell to their lowest in five months. 

Technically market is under fresh buying as the market has witnessed a gain in open interest by 5.57% to settle at 15606 while prices are up 297 rupees, now Gold is getting support at 59753 and below same could see a test of 59424 levels, and resistance is now likely to be seen at 60259, a move above could see prices testing 60436.

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