Wednesday, 8 May 2013

Gold Down Mildly On Profit Taking

Gold futures are trading mildly lower in the Asia electronic session today as traders booked profit after the counter surged nearly 2% yesterday. The rate cuts by two central banks also proved bullish for the metal.
The Bank of Korea and Bank of Australia slashed their rates today and yesterday respectively. The Bank of Korea on Thursday cut its key interest rate by a quarter-point to 2.5%. Korean stocks were higher after Thursday's rate decision, with the Kospi Composite Index up 0.3% at 1,962.05.
Also yesterday, the Reserve Bank of Australia lowered rates surprising the markets. The RBA trimmed the policy cash rate by a quarter-point to 2.75%, with Gov. Glenn Stevens citing soft economic growth, tame inflation, “subdued” credit demand, and a historically high level for the Australian dollar.
Growth in Australia was close to trend in 2012 overall, but was a bit below trend in the second half of the year, and this appears to have continued into 2013,” Stevens wrote in a statement accompanying the decision, adding that employment growth has failed to keep up with population gains.
On the data front today, China's consumer price index rose slightly more than expected in April, while wholesale prices extended their fall. The April CPI showed a gain of 2.4% from a year earlier, led by a 4% rise in food prices, the National Bureau of Statistics said Thursday. The gain was more than March's 2.1%, though below February's spike of 3.2%.
The producer price index, meanwhile, fell by the most since October, dropping 2.6% against a decline of 1.9% in March. Chinese shares lost ground after the numbers, which would tend to reduce the odds of Beijing maintaining a loose monetary policy.
MCX June gold may open today’s session near Rs 27180 with support near Rs 27100 and Rs 26850 levels.

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