Gold prices slipped lower on Friday, since the U.S dollar recovered moderately from losses posted in the previous session, despite the ongoing geopolitical concerns expected to support safe-haven demand. In the New York Mercantile Exchange’s Comex division, gold futures for April delivery were down 0.28% at USD 1,238.05. The April contract ended Thursday’s session 0.69% higher at USD 1,241.60 an ounce. However, the dollar regained some ground on Friday, aided by recent upbeat data and positive comments by Federal Reserve Chair Janet Yellen.
Meantime, in Indian domestic stock market, Nifty50 closed at 8821.70 levels, up by 43.70 points while Sensex closed at 28468.75 levels, up by 167.48 points.
Gold was pressed in last session under comments from US Fed Chief Janet Yellen. The precious metal took a drop on 13 Jan 2017, sine rising equities clubbed with failure to hold above 200 day Exponential Moving Average hurt the metal.
Gold Prices had tested a 3-month high above USD 1240 per ounce last week before drifting lower. The counter also seen lack of buying as speculative fund demand remained thin. However, the metal is presently trading moderate level at USD 1227 per ounce. MCX Gold futures tested a low near Rs 28,950 levels on Tuesday and ended just above Rs 29,000 per 10 grams mark.
The Federal Reserve can hike interest rates at a gradual pace, Fed Chair Janet Yellen told lawmakers on Monday. She told, if the labor market continues to strengthen and inflation moves to the central banks 2% target, a further adjustment of the federal funds rate would likely be fitting. However, changes in fiscal policies could potentially affect the economic outlook.
Gold slipped on Monday as the dollar made stronger against the yen after Trump-Abe meet. Spot gold had slipped 0.31% to USD 1,230.22 per ounce, while US gold futures were down 0.36% at USD 1,231.3. The US dollar also found broad support in the wake of comments by Trump on Thursday that he planned to announce an ambitious tax reform plan in the next few weeks, relighting expectations for big tax cuts. The dollar index was firm at 100.820.
In other precious metals, spot silver was mostly unaffected at USD 17.95 per ounce, after touching USD 18, the highest since Nov. 11, 2016, earlier in the session.
RBI may finally go for a 25 bps rate cut in August if a good monsoon contains core inflation at a moderate 4-5%, as per report of Bank of America Merrill Lynch (BofAML). BofAML had expected a 25 bps rate cut in the Feb 8 policy meet considering the demonetization shock, low inflation, lower fiscal deficit and a stabilizing US dollar. The report noted that the RBI has also cut down inflation risks broadly in proportion to its own forecasts.
The RBI Sixth bimonthly monetary policy review kept its repo rate unchanged at 6.25% in the meeting held today, opting to wait for more clarity on inflation trends and on how a drastic crackdown on black money after demonetization, is impacting economic growth.
Marginal Standing Facility and Bank rate kept unchanged at 6.75%. The Fiscal 2017 GVA (Gross Value Added) seen at 6.9% and the Financial year 2018-GVA seen at 7.4% with rick evenly balanced, while Consumer Price Index (CPI) seen below 5%. Repo rate is the rate at which the central bank of a country provide loadn to commercial banks in case of any shortfall of funds.
Meantime, Sensex is trading at 28228 down by 207 points or 0.38%. Nifty is trading at 8745 down by 23.45 points or 0.27% at 3.00 pm today.
COMEX Gold soared to near 3-month highs on 3 February, since a break above USD 1200 per ounce extended. The commodity currently trades at USD 1223 per ounce, up about 1.25% on the day. The breakout is seeing solid after prices tested their 2-week low near USD 1185 levels earlier this week before recovering sharply. The MCX Gold April futures ended at Rs. 28,874 per 10 grams after hitting highs near Rs 29,080 per 10 grams on 2 Jan, adding 0.67% on the day.
The Finance Minister has proposed to trim down the existing rate of taxation for individual assesses between income of Rs 2.5 lakhs to Rs. 5 lakhs to 5% from the prevailing rate of 10%. This would reduce the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50% of their existing liability.