Gold dropped as dollar index held near two-month highs above 104

Gold yesterday settled down by -0.18% at 59353 as the held near two-month highs above 104 lifted by growing expectations that US interest rates could stay elevated for longer than previously anticipated. The most recent PCE inflation data exceeded market expectations, leading to speculations that the Federal Reserve will maintain its hawkish stance and keep rates elevated for an extended period. Moreover, personal spending rose more than expected, and durable goods orders unexpectedly increased. Meanwhile, it looked like the White House and Republicans narrowed the differences and the debt deal will likely be concluded before the deadline. 

Physical flipped to premiums in India for the first time in nearly three months, as retreating domestic prices along with the central bank’s move to withdraw the country’s highest value currency notes boosted buying. Indian dealers were charging a premium of up to $3 an ounce over official domestic prices, up from last week’s discount of $5. In top bullion consumer China, gold changed hands between premiums of $2 and $6.50 to global prices, which were set for a third straight weekly drop. After buying more gold than any other central bank in 2022, Turkey went on a selling spree, offloading 81 tonnes in April and 15 tonnes in March. 

Technically market is under long liquidation as the market has witnessed a drop in open interest by -39.45% to settle at 3805 while prices are down -107 rupees, now Gold is getting support at 59166 and below the same could see a test of 58978 levels, and resistance is now likely to be seen at 59601, a move above could see prices testing 59848.



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