Trading sentiment turned better as gold and silver advanced in the global markets as faster-than-forecast inflation in China and a resurgence of Europe’s sovereign-debt crisis increased the demand for precious metals as a store of value.
At the Multi Commodity Exchange, gold for June delivery rose Rs 93 or 0.42 per cent to Rs 22,241 per 10 grams with a business volume of three lots. Similarly, August contract moved up by Rs 95 or 0.42 per cent to Rs 22,529 per 10 grams with an open interest of a single lot.
Market analysts said apart from a firming global trend, increased buying by speculators mainly pushed up gold futures prices. Meanwhile, the yellow metal gained 0.5 per cent to $1,524.40 per ounce in the Asian region.
India gold extends gain on Euro debt crisis
Gold extended its advancement as the resurgence of Europe’s sovereign debt crisis drove up demand for precious metals as havens investment. Spot gold settled 0.17% up from the prior closing and the same has been observed in the futures in both COMEX and MCX division.
The dollar index continued to descent to settle 0.24% down from the prior closing at 74.559 which led the metal to grow.
The US wholesale inventory piled up raising the concern about reduced demand and an increasing import price index is an indication to a sliding dollar index.
Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded further slid to1201.95 tons from 1205.38 tons from as on 10th May, after sell offs have seen in the last week.
The gold-silver ratio again slid back to 39.41 from 40.50 after silver rebounded fast than gold.
Outlook:
At the Globex platform Gold is seen trading $1521.20, up by $4.30 from the previous closing. The Asian equities are trading flat, mostly at a positive note. Dollar index at present is slightly up by 0.06%.
In the morning, China’s consumer prices rose 5.3% in April from a year earlier after which they have said to maintain a prudent monetary policy. This higher than expected inflation readings might result in some medium term support for precious metals.
With the resurfacing of Euro zone sovereign debt concerns, we expect to see continued appetite for precious metals. However, the mostly waited US budget statement will be announced today which is expected to reduce its deficit amount than the prior, may give the dollar a boost.
Also the Bank of England’s inflation report is yet to release and is likely to determine the Euro’s fate after the currency got weaker on Greece’s news.
So, in the evening it is expected that the dollar index may get stronger and will put some pressure on the metal. Overall gold is likely to trade at a higher side in the early session but gradually may release some tint as and when dollar index revives to gain more strength.
gold price predictions for Juni 2011, Bank of England’s inflation report 2011, China’s consumer prices, Gold prices open market interest rate may 11 2011.
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