Gold prices traded on an uneventful note, as rising sovereign bond yields in the developed world have dented the buying appetite for the yellow metal. In this regard, US 10yr yields are at six week high, while yields on German 10yr Bund is at 18 month high of 0.57%. On demand front, World Gold Council has lowered India’s gold consumption forecasts for 2017, expecting annual intake at 650-700 tons, much lower than the five year average of 846 tons. This downgrade comes in light of uncertainty over impact of the new Goods and Services Tax on domestic gold purchases.
An increase in taxes on gold sales in India could curb short-term demand from the world’s No. 2 consumer of the metal, the World Gold Council (WGC) said. Gold demand in India lost steam this week as consumers held off after stepping up purchases ahead of a new tax policy effective this month, while fresh buying in China also remained sluggish despite a slide in global spot prices.
Technically market is under short covering as market has witnessed drop in open interest by -0.74% to settled at 6306 while prices up 9 rupees, now Gold is getting support at 28076 and below same could see a test of 28036 level, And resistance is now likely to be seen at 28172, a move above could see prices testing 28228.
Gold Trading Idea Today :
# Gold trading range for the day is 28000 – 28200.
# Gold eased as weaker-than-expected private sector payrolls data fed into a more cautious view on the pace of U.S. interest rate hikes and Treasury yields firmed.
# Fed’s minutes showed a lack of consensus among policymakers over the outlook for inflation and how it could impact on the future pace of interest rate increases.
# Several officials also wanted to announce a start to the process of reducing the Fed’s large portfolio of Treasury bonds and mortgage-backed securities by the end of August.