MCX Gold under short covering; Support seen at 46836
Commodity Online | May 21 2020
UPDATED 09:30:26 IST

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Technically Gold market is under short covering as market has witnessed drop in open interest by 5.06% to settled at 10507 while prices up 81 rupees.

Now MCX Gold is getting support at 46836 and below same could see a test of 46541 levels, and resistance is now likely to be seen at 47390, a move above could see prices testing 47649.

Gold yesterday settled up by 0.17% at 47131 supported by hopes of further monetary policy loosening around the world that continues to channel money out of bonds and into bullion.

The Federal Reserve’s latest policy meeting minutes reinforced its promise to hold U.S. interest rates at near zero and to continue providing the economy with cheap money until it was clear of Covid-19.

Data showed, U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, intensifying fears over deepest economic contraction in the second quarter since the Great Depression.

In testimony before the U.S. Senate Banking Committee, Federal Reserve Chairman Jerome Powell said the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.

Citing the unprecedented speed and scope of the coronavirus-induced economic downturn, Federal Reserve Chair Jerome Powell said Wednesday the central bank may take additional steps to avoid an extended period of low productivity growth and stagnant incomes.

"At the Fed, we will continue to use our tools to their fullest until the crisis has passed and the economic recovery is well under way," Powell said during a webcast hosted by the Peterson Institute for International Economics.In Japan, business confidence collapsed in May, hitting decade lows as firms braced for a protracted period of economic weakness, the Reuters Tankan survey showed.

Trading Ideas:
--Gold trading range for the day is 46541-47649.
--Gold gained supported by hopes of further monetary policy loosening around the world that continues to channel money into bullion.
--The Federal Reserve’s latest policy meeting minutes reinforced its promise to hold U.S. interest rates at near zero.
--Fed’s Powell said the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.

Courtesy: Kedia Commodities

Commodity Arrivals Rate
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Coconut Oil 0.1 18900.00
Arecanut 266 39771.00
Sugar 197 3282.00

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