GOLD INCHES UP; STRONG DOLLAR LIMITS GAINS

Published on Aug 28, 2023 14:28

Gold futures are trading marginally higher in the Asia electronic trades today, however the gains were capped by solid rally in the US dollar. The commodity managed to end the week with the gains of more than 1% last week and bottomed out from the benchmark $1900 per ounce and Rs 58000 per 10 gram levels in the international and domestic market respectively.

Rally in the US dollar index above 104 mark, which is its highest in nearly three-month limited gains for the commodities traded in dollar. Dollar strength came on the back of hawkish outlook by Fed Chair Powell, who indicated the Fed`s readiness to raise rates if necessary and maintain a restrictive policy until inflation decreases sustainably. However, he emphasized cautiousness in subsequent hikes due to progress in mitigating price pressures and the robust US economy.

MCX bullion futures for October delivery are trading up Rs 85 at Rs 58725 per 10 grams. The counter should find resistance near Rs 58900 and Rs 59190 levels this week.

This week`s focus is directed towards the PMI data for August, anticipated to unveil the fourth successive month of contraction in China`s manufacturing sector, possibly impacting broader business activities. Moreover, essential US employment metrics are set to be unveiled on Wednesday and Friday, accompanied by the second evaluation of Q2 GDP growth on Thursday.