Gold prices edged down yesterday on recovery in dollar from its month low levels. However the fundamentals are continuously supporting gold.
Fitch warned it would downgrade the U.S. sovereign ratings in August if the government fails to honor payments on Treasury securities due on August 15, further added to global uncertainties. We expect the prices to trade in a range ahead of US next policy move.
The current global concern of European debt crisis, MENA unrest and faltering economic growth outlook of two major economies Japan and US in near term may undoubtedly support safe haven demand for gold.
The unchanged SPDR holdings for gold from Tuesday to Wednesday suggests investor's faith in metal is intact, Whereas the volatility in currency market especially dollar may dampen gains.
Gold may also get hurt on weak physical market as traders are waiting for bigger falls in a seasonally lean demand period.
Investors may take cues from currency market on rate decision by the European Central Bank later in the day.
Courtesy: Religare Commodities
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