SF: Precious Metals drops on strong US dollar index
Spot gold prices declined yet gain, closing at $1325/oz on Thursday, after touching an intra-day low of $1317/oz.
The yellow metal prices declined sharply for a second time in this week. On the MCX platform, the December gold contract for delivery closed at Rs 19328, down by almost 1%.
Gold prices on the MCX have lost more than 3% since touching a record high of Rs 20,028 earlier in this month.
The US Dollar Index (DX) gained slightly on Thursday as investors remained skeptical over the G20 meeting which begins from today.
The currency segment is expected to be the main focus of the meeting. Economic data from the US yesterday indicated that the US unemployment claims declined by 23,000 to 452,000 in the week ending Oct 15th. Markets had anticipated jobless claims to increase to 454,000.
The Philly Fed Manufacturing Index rose to 1 in October from the previous of minus 0.7 in the month of September. Markets had expected the index to rise to 2.3. CB leading index of US increased by 0.3% in September following the previous 0.1% increase in August.
SPDR gold holdings continued to fall for a second consecutive day yesterday. The world's largest gold-backed exchange-traded fund, said its holdings slipped to 1,298.266 tonnes by Oct. 21 from 1,299.177 tonnes on Oct 20. The holdings hit a record at 1,320.436 tonnes on June 29th.
OUTLOOK
Gold prices may gain slightly in today’s session as any sharp fall in the yellow metal prices is attracting investors. However, sharp gains may not be witnessed on the upside as major factors comprising the quantitative easing program and other economic indicators have been already priced in.
Moreover, gold sales during the festive season in India is expected to decline this year considering the higher prices, which will also affect prices.
On intraday basis, Spot Gold prices have support at $1311/$1298 whereas resistance is seen at $1330/$1343. Spot Silver prices shall find support at $22.75/$22.34 whereas resistance is seen at $23.41/$23.83 levels.
MCX December Gold has support at 19220/19110 whereas resistance is seen at 19415/19520. MCX December Silver shall find support at 34560/34180 whereas resistance is seen at 35250/35630 levels.
