Thursday, 22 August 2013

MCX Gold Reverses Direction, Global Prices Not Moving Much

MCX Gold flipped back in the afternoon after recording heavy gains. The Indian Rupee fell above 65 per US dollar and pushed up the metal on the local bourses. However, global prices continued to face resistance as the Fed looked set to trim its asset purchases by the year-end. COMEX Gold is hovering at $1370 per ounce- unchanged on the day after hitting its two-month high levels earlier in the week. MCX Gold quotes at Rs 31352, down Rs 92 per 10 grams or 0.30% on the day.

The keenly awaited minutes of the last US Fed meet revealed yesterday that ''a few'' members of the Federal Open Market Committee (FOMC) ''suggested that it might soon be time to slow somewhat the pace'' of asset purchases, the minutes said. But the timing of the Fed's plan to taper its stimulus program remained unclear, as others in the group ''emphasized the importance of being patient''. They said more data gauging growth in the economy was needed before reducing the $US85 billion-a-month bond-buying program.

Fed officials also discussed the rise in interest rates following the June FOMC meeting. Some participants indicated that overall financial-market conditions had tightened significantly. They also expressed concern that the higher level of longer-term interest rates could be a significant factor holding back spending and economic growth.

The exports of gold jewellery from India dropped 70% in July due to non-availability of the raw material, while silver jewellery shipments more than doubled in the same period, the Gems and Jewellery Export Promotion Council (GJEPC) said. Shipments of gold jewellery fell to $441.4 million in July from the $1.5 billion in the year ago period, the total gems and jewellery exports fell 17 percent to $2.49 billion, the GJEPC noted. Gold imports into India are expected to re-start by next week after the central bank clarified a new rule that brought the flow of the precious metal into the world's top gold consumer to a standstill at the end of July.

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