MCX Gold futures for June are trading marginally on a bearish note as the global prices retreated in Asian trades after gaining overnight. The equities in Asian are mixed though the bearish undertone in very much evident in Japanese stocks after a massive 7% correction yesterday. Markets are worrying about a possible reversal in ultra easy money policies of the US Fed much earlier than what was expected. The turmoil in equities has been supportive for Gold though. The metal rallied from lows around $1355 per ounce and neared $1400 per ounce yesterday. The counter quotes at $1391.40 per ounce, down 40 cents per ounce on the day right now.
Chinese growth worries came back to the forefront yesterday. China HSBC flash manufacturing PMI for May came in at 49.6, down from 50.4 in April and down from 50.4 expected for May. This is a seven month low back into contraction territory reflects slowing domestic demand within China and global slowness hindering exports. The sentiments were already down after the US Fed minutes and Bernanke comments yesterday. Japanese stocks slipped by more than 7% amid a wild run in government bonds and European stocks are also down around 2%.
US Federal Reserve chairman Ben Bernanke hurt the risky assets on Wednesday by suggesting the current quantitative easing measures that have been pushing US growth could start to taper off as soon as June. His speech tried to balance competing objectives. He said the US economy was improving but headwinds including government spending cuts were dragging on the recovery. He said the job market was improving but it remains weak overall and participation rates are still moving down. However, Gold has been broadly supported after the Fed comments.
The metal has slipped nearly 20% this year as some investors lost faith in the metal as a store of value and amid concern that the Fed may scale back economic stimulus measures. Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, dropped to 1,020.07 metric tons yesterday, the lowest since February 2009, maintaining an outflow, which has been a perennial feature of gold trade this year. The local gold futures have been supported given the buying in spot markets around Rs 25800-26200 levels. The MCX Gold futures are trading at Rs 26377, down Rs 63 per 10 grams or 0.24%. Prices had briefly hit above Rs 26500 in early moves.
Chinese growth worries came back to the forefront yesterday. China HSBC flash manufacturing PMI for May came in at 49.6, down from 50.4 in April and down from 50.4 expected for May. This is a seven month low back into contraction territory reflects slowing domestic demand within China and global slowness hindering exports. The sentiments were already down after the US Fed minutes and Bernanke comments yesterday. Japanese stocks slipped by more than 7% amid a wild run in government bonds and European stocks are also down around 2%.
US Federal Reserve chairman Ben Bernanke hurt the risky assets on Wednesday by suggesting the current quantitative easing measures that have been pushing US growth could start to taper off as soon as June. His speech tried to balance competing objectives. He said the US economy was improving but headwinds including government spending cuts were dragging on the recovery. He said the job market was improving but it remains weak overall and participation rates are still moving down. However, Gold has been broadly supported after the Fed comments.
The metal has slipped nearly 20% this year as some investors lost faith in the metal as a store of value and amid concern that the Fed may scale back economic stimulus measures. Assets in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, dropped to 1,020.07 metric tons yesterday, the lowest since February 2009, maintaining an outflow, which has been a perennial feature of gold trade this year. The local gold futures have been supported given the buying in spot markets around Rs 25800-26200 levels. The MCX Gold futures are trading at Rs 26377, down Rs 63 per 10 grams or 0.24%. Prices had briefly hit above Rs 26500 in early moves.
Source by Commodity Insights
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