VoV Web Desk

Gold prices fall to lowest in nearly 6 months, silver down too

Decrease Font Size Increase Font Size Text Size Print This Page

Gold prices were down on Monday tracking global cues with markets keeping an eye on a US Federal Reserve meeting for clues on when the central bank will start tapering its stimulus measures. On Multi Commodity Exchange (MCX), gold was down 0.13 per cent to  45,928 per 10 gram and silver rates dropped 1 per cent to  59,427 per kg. Gold dropped 0.16 per cent and silver was down 1.76 per cent in the previous session.

Geojit said choppy movement in gold is expected with a negative bias to continue the day. “A direct drop below $1740 would trigger further major selling pressure,” the brokerage said. “For silver, weak bias to continue initially but stiff support seen at $21.80 which may hold further major liquidation pressure,” it added.

Kotak Securities said gold may remain volatile reflecting the trend in US dollar and equity markets as market players assess Fed’s monetary policy and China’s economic health. It expects gold rates to stabilise near the $1750/ounce level.

Globally, spot gold fell 0.3 per cent to $1,748.69 per ounce by 0312 GMT. Prices touched $1,741.86 earlier in the session, their lowest level since August 12. US gold futures fell 0.1 per cent to $1,749.00. The dollar index hit a near one-month high, hurting gold’s appeal for holders of other currencies.

Stephen Innes, a managing partner at SPI Asset Management, said that the market is starting to think that a taper announcement by the US Fed could be imminent and that there could be a hawkish surprise in the dot plots. “It really looks like the markets turned quite bearish on gold, with some critical support levels ($1,780 and $1,750) giving away and I think this does open up for a test of $1,700,” Innes told Reuters.

According to Reuters, the US Fed is will likely open the door to reducing its monthly bond purchases when it meets on September 21-22, while tying any actual change to job growth in September and beyond. The American central bank may also release fresh economic projections and a new read on officials’ interest rate expectations.

HT

Leave a Reply

Your email address will not be published. Required fields are marked *