Last Updated : 01 October 2012 at 18:10 IST
'Level between $1,785 and $1,790 has a ceiling on Gold'
Two data releases for the evening would determine the trajectory of gold prices for the coming days.
- Precious, base metals may trade mixed as upbeat US GDP bolsters Fed QE taper
Spot gold prices fell around 0.7 percent today taking cues from mixed global market sentiments. Also, decline in SPDR Gold holdings by 4 tonnes yesterday acted as negative factor.
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Gold prices have possibly established a base now at $1,740, but “we also seem to have a ceiling in place between $1,785 and $1,790,” Marex Spectron’s David Govett said to Angela Sharda of Fast Markets.
“It will take some help from other markets to break us one way or the other, as gold does not yet seem to have the appetite to do this by itself.” he added.
Meanwhile, two data releases for the evening would determine the trajectory of gold prices for the coming days.
Manufacturing Purchasing Managers Index (PMI) published by Institute of Supply Management or ISM is a widely awaited figure by investors, economists and policy makers as it beams light into the state of the US economy in terms of employment, production, new orders, prices, supplier deliveries, and inventories.
This time around, the figure is forecast to touch 49.7 while earlier on September 4, the figure stood at 49.6. A figure below 50 is indicative of contraction in the industry and draws from a survey based approximately on 400 purchasing managers in the manufacturing segment.
A higher than expected reading would be bullish for USD and therefore bearish for bullion.
This time around, Ben Bernanke is expected to address the QE skeptics and may stress on two things: the QE 3 measure—the third round of Quantitative Easing wherein the Federal Reserve would buy mortgage-backed securities to the tune of $40bn a month until the labour markets recover —has the potential to work well and can be managed well. He will speak on ‘Five questions about Federal Reserve and Monetary Policy’.
As per sources, Federal Reserve may purchase treasuries to the tune of $45 billion a month as and when the Operation Twist comes to an end.
His comments may give further cues to the bullion market.
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