- Created: Monday, 20 October 2014 15:01
MCX Gold futures headed for its consecutive second weekly advances and trading near to its 5 weeks high on the concerns about health of the world economy due to weak equities coupled with the on going festival demand in India. Gold also rebound on the expectation that the Federal Reserve may delay interest-rate increase, which further supported the upward movement. Festive demand from India and weak INR against U.S. Dollar acted as catalyst for positive movement in gold. MCX gold showed bullish movement for the entire week & closed with the marginal gain of more then 1 percent on the weekly basis.
COMEX Gold witnessed two weeks consecutive gains on concerns persistent fears over the health of the economy took a toll on global equities and the dollar, bringing in safe-haven demands for the yellow metal. Core retail sales, PPI & retail sales data also witnessed the negative outlook for U.S. Economy last week & increased the glitter of gold. Holdings in the World largest gold-backed fund, SPDR Gold Trust were rose 0.24 per cent to 760.94 tonnes on Thursday.
Silver witnessed range bound movement last week and tracked the global market trend. Silver witnessed slightly bullish movement in the initial part of the week due to short covering on lower levels & negative U.S. data, but till the end of week, all of its earlier gains were erased & it closed near to last week closing. Silver prices taking support from physical market due to strong seasonal period for consumption which can lead the prices upside. MCX Silver traded near 1 year 3 months low & COMEX Silver is still sustaining around to its 4 years low and trading above major psychological support level of $17.00
Physical demand of Gold & Silver has picked up slightly in India with the lower prices of these precious metals. Gold imports are estimated to have jumped about five-times to around 95 tonnes in September 2014 as compared to Gold imports in September 2013 around 15-20 tonnes, supported by spurt demand in festival season and falling global prices. Imports of gold rose mainly due to decline in price in global markets and September imports is a very normal phenomenon as jewelers require stocks to manufacture for the festive season. According to government data, gold imports were at $3750 million in September this year compared to $682.5 million in the same month last year. Indian jeweler have already manufactured jewelry of the gold imported during September for the festivals. The money earned from the sales of these jewelry will make them buy more gold in October and November, which may decline in December. Oil imports during September were valued at $ 14.4 billion which was 9.7 per cent higher imports in the corresponding period last year. Due to rise in Gold and Oil imports, India's trade deficit for September has widened to $14.25 billion which can also support the prices to trade higher in festive season.
MCX Gold traded on higher levels last week, it started the week on positive note and continued to trade higher. It sustained above the psychological level of 27000 and tested the level of 27600 on the up side. This week we can expect sideways to negative movement in MCX Gold December futures and it can test the levels of 27000 – 26800 on the downside.
Similarly MCX Silver also opened on positive note last week and traded in the range of 38300 – 39200 for the entire week. For this week, we can expect bearish positive movement in Silver MCX December futures & and it can test the levels of 37800 – 37500 on the downside.
For this week, major U.S. data Core CPI, Unemployment Claims and New home sales coupled with physical demand in Asian region will further provide direction to the bullions. Further progress in the quantitative easing by U. S. government will also provide base for the market movement.