Gold rose to a month high on speculation that US will be limping to fasten its recovery, eroded the demand for the value of dollar and boosted the appeal for the precious metal.
The dollar index settled 0.28% higher from the prior closing yesterday on absence of any economic releases from the US
Global equities closed all most all at a downside on weaker economic releases from the US
Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded remained unchanged at 1212.86 tons as on 6th June
The gold-silver ratio slid a bit to 42.06 from 42.61
OUTLOOK:
At the Globex platform gold is seen trading at $1541.30, down by $2.80. Asian stocks fell for the third consecutive day leading the Asian benchmark index to drop by 0.3%. The Yen appreciated against the dollar, hurting the export earnings and before reports today and tomorrow that may show a US index of optimism fell in June and German exports declined in April. The Euro is gaining against the dollar after the ECB president indicated his willingness to sanction bond rollovers in Greece.
Fed chairman Ben Bernanke is scheduled to deliver a speech in the afternoon today about “The US economic outlook” and the proximity of his remarks to the upcoming FOMC meeting on June 21 are likely to make it an opportune to set the market expectation.
Coming to the economic data front, the Euro zone retail sales and German factory orders may improve which might impact positively upon the Euro. However, any indication towards settling down the debt ceiling and any decisive cue to bring back the economy into growth path may boost the dollar.
Overall, we expect gold will be under stress for the day on anticipation of the US economic outlook. However depreciation in rupee might limit the downside. Hence, it is recommended to be short for the metal.
