Gold settled down -0.31% at 26137 as hopes for a successful resolution to Greece’s debt talks boosted assets seen as higher risk, such as stocks. Greece’s government confirmed it would ask for an extension to its loan agreement with the euro zone, which it distinguishes from its full bailout programme.
The market is awaiting further direction from the minutes of the U.S. Federal Open Market Committee’s (FOMC) policy meeting later, but looked vulnerable to further losses with the absence of Chinese buyers during the Lunar New Year break. Gold has come under pressure from expectations the Fed will raise interest rates as early as June this year, potentially lifting the dollar and boosting the opportunity cost of holding non-yielding assets, such as bullion.
The U.S. Commerce Department said that the number of building permits issued last month decreased by 0.7% to 1.053 million units. The report also showed that U.S. housing starts declined by 2.0% last month to hit 1.065 million units from December’s total of 1.087 million units, worse than expectations for a decline of 1.7% to 1.070 million. A separate Commerce Department report said that producer prices fell by 0.8% last month, compared to forecasts for a 0.4% decline.
Year-over-year, the producer price index was flat in January. The core producer price index eased down by 0.1% last month, compared to forecasts for a gain of 0.1% and following an increase of 0.3% in December. Technically market is under long liquidation as market has witnessed drop in open interest by -1.48% to settled at 9065 while prices down -82 rupee, now Gold is getting support at 26022 and below same could see a test of 25908 level, And resistance is now likely to be seen at 26298, a move above could see prices testing 26460.
Gold remains flat as confusion over Greece’s debt negotiations with its European lenders dominated markets. Financial markets had been under pressure as euro zone finance ministers were unable to agree with Greece a final statement or a way to continue talks until their next meeting on Monday to extend an international bailout. Gold’s sell-off for much of this week, despite the Greek debt crisis, suggests that markets are either expecting an ultimately positive result, or they may be discounting the country’s possible exit as a net positive.
An interest rates hike by the U.S. central bank, which has kept rates near zero since 2008 to stimulate the U.S. economy, could further strengthen the dollar and in turn hurt demand for bullion, a non-interest-bearing asset . India is likely to remain the world’s biggest gold consumer this year after regaining the top spot from China in 2014, driven by robust jewellery demand, the World Gold Council (WGC) said.
Indian consumer demand for gold jewellery and investment totalled 842.7 tonnes last year, compared with 813.6 tonnes by China, according to WGC data. Demand dipped in both countries in 2014 from record levels a year earlier, but Indian demand slid only 14 percent, compared with a much steeper 38 percent fall in China.
The two countries accounted for over half of global demand. Global gold demand also hit a five-year low last year as buying of jewellery, coins and bars failed to keep pace with 2013′s elevated levels, the WGC said. Technically market is under long liquidation as market has witnessed drop in open interest by -0.73% to settled at 8705, now Gold is getting support at 26418 and below same could see a test of 26317 level, And resistance is now likely to be seen at 26710, a move above could see prices testing 26901.
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MCX SILVER ANALYSIS REPORT TODAY
Silver settled down -0.26% at 36278 on speculation Greece will ease a standoff with its creditors and before the Federal Reserve releases minutes of its last meeting. Talks over funding for Greece collapsed when euro-area finance ministers said aid would only continue if the newly elected government asks for an extension of its current bailout program.
Investors are looking ahead to the release of the minutes of the Federal Reserve’s latest meeting for further indications on when the central bank may start to hike interest rates. Expectations of higher borrowing rates going forward is considered bearish for bullion, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise. Greece’s current €240 billion bailout is due to expire at the end of the month, fuelling worries the country will run out of money. According to sources familiar with the matter, Athens intends to ask for a six-month extension of its loan agreement with its international lenders later in the day, easing concerns over the country’s future in the euro zone.
A separate Commerce Department report said that producer prices fell by 0.8% last month, compared to forecasts for a 0.4% decline. Year-over-year, the producer price index was flat in January. A National Association of Home Builders report showed an unexpected deterioration in U.S. homebuilder confidence in February, reflecting the unusually high snowfall across much of the country.
Technically market is under long liquidation as market has witnessed remain unchanged in open interest by 0% to settled at 9770 while prices down -96 rupee, now Silver is getting support at 36038 and below same could see a test of 35799 level, And resistance is now likely to be seen at 36648, a move above could see prices testing 37019.
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