Where is Gold heading to?
Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the U.S. economy, could hurt demand for bullion.
A new monthly bullion report by Angel commodities say from a month’s perspective, spot gold prices (CMP:$1197) in the international markets is expected to trade lower towards $1150/oz while MCX gold June prices (CMP:Rs.26525) might possibly head lower towards Rs.25500/10 gms mark.
Sentiment towards gold remained bearish as the outlook for the dollar remains upbeat, with many investors continuing to price in an interest rate hike by the U.S. Federal Reserve some time this year.
Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the U.S. economy, could hurt demand for bullion, a non-interest-bearing asset.
CFTC positioning has seen a decline in the speculative activity in the recent weeks and this will further exert downside pressure on prices. Outlfows from the SPDR gold trust also shakes the investment sentiment towards gold as a asset class, the report says.
Spot gold prices declined by around 2.5 in March 2015. Prices traded in a range of $80 making an high of $1223.2/oz and a low of $1142.6. The yellow metal closed last month at $1183.1/oz.
Strenghthening dollar, optimism about the US economy, rise in the interest rates in the US, the job market scenario in the US, were all the possible factors for the downward trajectory of gold prices.
Gold tends to be an investor favourite when geopolitical tensions rise and risk-appetite dips. Tensions in the Middle East after Saudi Arabia and its allies launched air strikes in Yemen provided some support to gold, seen as a safe-haven asset.
MCX gold prices declined by around 0.1 percent as the yellow metal largely ignored the fall in international markets. Rupee weakness of around 1.03 percent cushioned sharp downfall in domestic markets. The yellow metal closed last month at Rs.26204/10 gms.
Source: Commodityonline – Where is Gold heading to?
