Wednesday 18 March 2015

Gold Gives Up As Investors Fret Over Fe

Gold seesawed today as investors eyed the FOMC meeting outcome later on tonight. TheCOMEX gold futures fell under $1150 per ounce in Asia following a continued firm undertonein the US dollar to mark another four month low. Indian demand is thin as buyers arewatching the prices anxiously and are refraining from heavy purchases. The overallmovement remains choppy. This is causing speculators in world markets to go easy on longstoo. The COMEX Gold futures are quoting at $1147 per ounce, down $1 per ounce on the day.MCX Gold futures are trading at Rs 25590 per 10 grams on the day, down Rs 27 per 10 gramson the day. The counter recovered from an intraday low of Rs 25500 per 10 grams.
Gold was little changed in US trading last night. US indexes mostly fell Tuesday as oilcontinued to drop and commodities stayed mostly under pressure. Investors fretted overwhen the Federal Reserve will raise a key borrowing rate. The Fed kicked off a two-daymeeting Tuesday to discuss rates, and will release a policy statement Wednesday. Theyellow metal edged up mildly earlier this week but the latest turnaround has indicated thefragility of the upmove.
The Indian Rupee firmed up further today. The INR is gaining in the current week astraders eyed the recent narrowing of the trade deficit. The local currency fell to its twomonth low above 63 per US dollar mark last week. India’s trade deficit narrowed to$6.8 billion in February as oil imports declined by over 55% from a month earlier. Thishas kept the rupee protected even as the US dollar soared to fresh highs against a numberof emerging market currencies. The Rupee closed around 62.69 mark in local spot markets,up 3 paise on the day.
Gold speculators and large futures traders continued to decrease their gold bullishbets last week for a sixth consecutive week and brought the overall bullish level to itslowest point since November, according to the latest Commitment of Traders (COT) datareleased by the Commodity Futures Trading Commission (CFTC) on Friday. The non-commercialfutures contracts of Comex gold futures, traded by large speculators and hedge funds,totaled a net position of 81,892 contracts in the data reported through March 10th. Thiswas a weekly change of -33,928 contracts from the previous week’s total of 115,820net contracts that was registered on March 3rd.

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