Gold.........
Gold futures gold a lift in the Asia electronic session today as the
investors jumped to buy the commodity after it tumbled another $15 to
below $1280 an ounce yesterday following the tightening credit
conditions in China.
U.S. and global equities sold off Monday,
taking their cue from a sharp drop in Chinese equities following a rise
in Chinese money-market rates. The sell off continued in the Asia today
on concerns about a Chinese liquidity squeeze which had sparked a global
selloff the previous day. Shanghai shares extended losses on worries
about the impact from high money-market rates.
The Shanghai
Composite Index fell 0.8%, recovering a little after falling more than
1% in the opening minutes. The Shanghai benchmark plunged 5.3% on Monday
for its worst finish in nearly four years.
Adding more pressure
on gold prices, analysts at Goldman Sachs cut their outlook on the metal
for 2013 and 2014, citing growing price risks from a brightening U.S.
economic picture. The bank now expects gold to end this year at $1,300 a
troy ounce, down 9.4% on its previous forecast. It sees gold ending
2014 at $1,050 an ounce, down 17.3% on its earlier outlook.
"Medium
term, we expect that gold prices will decline further given our U.S.
economists' forecast for improving economic activity and a less
accommodative monetary policy stance," the bank said. "Further, with
quantitative easing tapering likely to start soon, perhaps even a bit
sooner than previously anticipated, we are fast forwarding on our real
rate path."
The price of gold plunged 6.3% in a single session
last week after U.S. Federal Reserve Chairman Ben Bernanke said the U.S.
central bank could start winding down its $85-billion-a-month
bond-buying program later this year.
Gold for August delivery is
trading up $1 at $ 1278.1 an ounce in the electronic trades today.
Yesterday, fell $14.90, or 1.2%, to close at $1,277.10 an ounce, after
having surrendered almost $100 over the course of last week’s trading.
MCX
August bullion may open today’s session near Rs 26850 levels with
resistance near Rs 26930 levels and support near Rs 26740 levels.
Source by Commodity Insights
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