MCX Gold futures went up in Asia today as buying interest returned
after a massive slide in the last session. Gold slipped for a third
session yesterday as traders locked further gains after recent array of
gains ahead of the US FOMC meet. COMEX futures had edged up above $1470
per ounce earlier in the week but failed to hold on above the level as
commodities witnessed yet another correction. However, some buying is
emerging now as investors get over the latest FOMC statement and wait
for the European banks turn today. COMEX Gold is quoting at $1454.40, up
$8.20 per ounce on the day.The Fed stated yesterday that information received since the Federal Open Market Committee met in March suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated.
Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Inflation has been running somewhat below the Committee's longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.
In fact, the Fed expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. This took aside the calls for an early end to the quantitative easing regime.
China's manufacturing sector slowed in April according to PMI data issued Thursday. On Wednesday, China's official purchasing managers' index (PMI), which mainly focuses on the state-owned enterprise sector, fell to 50.6 in April from 50.9 in March, indicating a slowdown in manufacturing activity that was led by a slump in new export orders. A reading above 50 indicates expansion in the manufacturing sector while a reading below 50 means that manufacturing activity shrank. Manufacturing also slowed in India, shrunk in Australia and rose in South Korea and Indonesia.
Gold had tumbled in a freakish manner a few days back. There were concerns that debt stricken European country Cyprus might have to sell gold holdings to raise finances. Traders fear that this would load up supplies in global markets in the short term. Massive unloading in Gold ETF's was also responsible for the worst crash in gold prices for three decades.
Prices have corrected more than 40 dollars in the current week and could edge up modestly now. The US dollar slipped to its two month low against the Euro yesterday though some moderate gains have emerged in the currency today. The greenback is quoting at 1.3161 against the Euro right now. MCX Gold futures broke under Rs 27000 per 10 grams this week and closed with heavy losses yesterday. The counter quotes at Rs 26599, up Rs 59 per 10 grams on the day with a 3% increase in open interest. Prices have dropped back from highs above Rs 26600 levels.
Source by Commodity Insights
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