MCX Gold market under long liquidation
Commodity Online | September 16 2016
UPDATED 16:47:32 IST

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Gold on MCX settled down -0.41% at 30910 dropped below 31k mark hitting two-weeks lows as improving stocks diminished gold's safe haven appeal. Trades sifted through a pile of mixed U.S. economic data ahead of next week's Federal Reserve rate decision. Gold slid to a two-week low after a mixed bag of U.S. economic data prompted selling ahead of next week's US Fed policy meeting. US economic reports showed retail sales fell more than expected last month, while the number of Americans filing for unemployment benefits rose less than expected last week.

The reports made investors less confident that Fed policy makers will raise U.S. interest rates when they meet on Sept. 20-21, but many say a rate hike in December is possible. Meanwhile the dollar was up 0.1 percent against a basket of six major currencies. A stronger dollar makes gold more expensive for holders of other currencies. The dollar had risen against the yen in morning trading on expectations the BOJ could ramp up monetary stimulus. While with China's markets closed through Sunday for the Mid-Autumn Festival, physical activity in the world's biggest gold consumer is expected to be quiet.

Whereas India's gold imports fell for a seventh straight month in August to $1.1 billion as sluggish demand and record high discounts prompted banks and refineries to reduce overseas purchases of bullion. Technically market is under long liquidation as market has witnessed drop in open interest by -2.86% to settled at 7706 while prices down -128 rupee, now Gold is getting support at 30742 and below same could see a test of 30574 level, And resistance is now likely to be seen at 31128, a move above could see prices testing 31346.

Trading Ideas:

--Gold trading range for the day is 30574-31346.

--Gold prices dropped as investors digested the release of a host of U.S. economic data.

--Data released earlier showed that retail sales in the U.S. declined for the first time in five months, fueling concerns over the economic outlook.

--SPDR gold trust holdings dropped by 0.35% i.e. 3.27 tonnes to 932.22 tonnes from 935.49 tonnes.

Courtesy: Kedia Commodities