Gold futures stayed beneath $1300 an ounce in the electronic trades today, with the Asian equities also trading lower on economic concerns.
Chinese
stocks declined to lead most Asian markets lower today, as a recent
spike in Shanghai interbank interest rates fueled worries about the
world’s second-largest economy. The Hang Seng Index in Hong Kong fell
1.5%, dropping for a fifth straight session to stay close to nine-month
lows, while the Shanghai Composite tumbled 2.2%.Gold futures for August delivery are down $1 at $ 1291 an ounce on the Comex division of the New York Mercantile Exchange. It rose 0.75% on Friday to settle the week at $1,295.55 a troy ounce. For the week, gold prices lost 6.8%, the worst weekly decline since September 2011. The metal is likely to find support near $1250 levels with resistance near $1315 levels.
Sentiment on the precious metals was dampened amid expectations the Federal Reserve will begin to taper off its bond-buying program by the end of this year.
Gold prices plunged more than 5% on Thursday after Fed Chairman Ben Bernanke said the central bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
MCX August may open today’s session near Rs 27000 per 10 grams. In the near term the commodity may find support near Rs 26700 levels and resistance near Rs 27800 levels.
In the coming week, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track.
Any improvement in the U.S. economy could scale back expectations for further easing, putting upward pressure on U.S. yields and boosting the dollar.
Source by Commodity Insights
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