Gold futures extended gains for the second day today covering its recent losses of more than $100 an ounce. However a breakage of $1600-610 levels looks challenging.
Gold for delivery in April is trading up $1595.8 up $9.2 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it settled at $1,586.60 an ounce, up $13.80, or 0.9%. That was the biggest one-day gain for futures prices month to date. Gold fell $5.80, or 0.4%, on Friday to settle at a seven-month low of $1,572.80 an ounce, closing out last week with a 2.3% loss.
Today gold was also supported by the QE friendly comments by Dennis Lockhart, the president of the Atlanta Federal Reserve Bank. He said that the Federal Reserve should stick with its current $85 billion per month bond-buying program, at least into the second half of the year.
"All things considered, I do not think that monetary policy has yet crossed the line where the benefits of the current policy -- specifically the quantitative easing element -- are swamped by serious concerns over problems the policy might be creating for the longer term," Lockhart said in a speech at the University of Tennessee. Markets have been worried that the Fed will scale back the bond-buying program after the minutes of the central bank's last meeting in January showed some officials are nervous about making the balance sheet bigger.
MCX April gold futures may open today;s session near Rs 29620 per 10 grams levels with resistance near Rs 29700 and support near Rs 29570 levels. Yesterday it ended little higher due to sharp appreciation in the Indian Rupee.
Source by Commodity Insights
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