Gold expected to move northward in the coming week
Gold is expected to move up in the coming week as the European Central Bank (ECB) cut the Euro zone economic projections for 2012 and 2013, indicating a further interest rate cut.
ECB expects the euro area economy to shrink 0.5 per cent this year, more than the 0.4 per cent contraction the bank had predicted in September. ECB cut its 2013 forecast to a contraction of 0.3 per cent from 0.5 per cent growth, and projects expansion of one per cent in 2014.
There are indications that ECB will cut interest rate from the current 0.75 per cent.
The US Federal Reserve, on the other hand, will keep low interest rates till mid 2015 and has announced a monthly purchase of $40 billion of mortgage-backed securities till the labour market improves significantly.
By the end of the year, the US will see a series of automatic spending cuts while tax breaks will end.
“This combination of spending cuts and tax increases, which will take effect if the president and Congress fail to reach a deal on reducing the deficit before year’s end will put pressure on the economy and some even fear another recession,” Kotak Commodity Services said in a report.
Currently, US president Obama is pushing for tax increases, while the Republican party is laying emphasis on spending cuts. This will put pressure on the dollar which will in turn cause the price of dollar-denominated commodities to increase.
“Gold is expected to move northward next week as major global economies still remain uncertain and an indication for further rate cut by ECB will prove supportive for gold,” said Ajay Kedia, managing director of Kedia Commodities.
The US Fed is expected to meet on Wednesday and some quantitative easing measures may be announced, which will give a a clear indication to gold in the coming week.
“But, the rupee is expected to appreciate against the dollar hence the upside for gold on the Indian market remains limited in the coming week,” said Naveen Mathur, associate director of commodities and currencies at Angel Broking, a Mumbai-based broking firm.
Ajay Kedia sees support for gold traded on Multi Commodity Exchange at 31,880 per 10 grams and resistance at Rs 32,560 per 10 grams.
Last week, gold on Mumbai spot market also moved down by 1.49 per cent and closed at Rs 31,326 per 10 grams.
Source: Business Standard
Search Our Archives
- Stocks Trading above their 50 day moving average - DMA In Stock Research
- Download free Ebooks based on Technical Analysis In Personal Training
- TOP 100 Stocks with the Highest P/E as on July 14th, 2013 In Stock Research
- TOP 100 Stocks with the Lowest P/E as on July 14th, 2013 In Stock Research
- Charting Pathsala - Your guide to Techincals In Technical Analysis
- mrp Hi cb , shall i exit from kalyani ste...In Intraday calls for 31-10-14
- CB ill be back by 7-8pm...In Intraday calls for 31-10-14
- CB Hi sayan, its a hold. can test 655 in ...In Intraday calls for 31-10-14
- CB Hi Abhishek Bonnerjee, sorry to hear t...In Technical View:: Nifty
- Abhishek Bonnerjee Hi Cb Kartik, been almost one year m ...In Technical View:: Nifty
- sayan Also, Aban offshore can test 633 on Mo...In Intraday calls for 31-10-14
- sayan Hi CB, gd afternoon. how many stocks/c...In Intraday calls for 31-10-14
- Prathmesh thank you sir, Is it more then 1 year ...In Intraday calls for 31-10-14
- Raushan ok thanx sir last day i had bought s...In Intraday calls for 31-10-14
- CB Hi SEBY, most welcome Hi avvsnr, mo...In Intraday calls for 31-10-14
- avvsnr Thank you sir for your kind suggestion...In Intraday calls for 31-10-14
- SEBY Hi CB, thank you sir...In Intraday calls for 31-10-14
- CB Hi Prathmesh, can add few of it at cmp...In Intraday calls for 31-10-14