Bullion Recovers from 3 week lows

Published on Jun 26, 2023 13:34

Gold futures started the week with fresh gains of $6.50 at $1936.30 an ounce in mid Asia session today following weakness in US dollar and losses in stocks.

The metal tumbled to the lowest level since 16th March, falling to as low as $1919.50 an ounce as dollar strengthened after Federal Reserve Chair Jerome Powell announced that they would be increasing rates later in the year and not in immediate near term.

COMEX gold international futures are trading up $8.20 at $ 1937 an ounce today. However, in the near term the metal is expected to be under selling pressure and may continue to face resistance near $1955 and $1970 levels.

Also the possibility of additional interest rate hikes by the Federal Reserve aimed at addressing persistent inflation, dampened the appeal of gold. Fed Chair Jerome Powell expressed a cautious approach towards rate hikes during his recent testimony. San Francisco Fed Bank President Mary Daly deemed two more rate hikes this year as "very reasonable."

Asia-Pacific markets started the final week of June mixed, even as U.S. markets snapped a multi-week winning streak Friday. Japanese stocks, represented by the Nikkei 225, dipped by 0.25%, while Hong Kong`s Hang Seng index continued its decline from the previous week, falling by 0.46%. Mainland Chinese stocks, after a two-day holiday, also experienced a drop, with the Shanghai Composite down by 1.48%.

Domestic bullion futures for august delivery are trading up Rs 217 at Rs 58524 per 10 grams. The metal tumbled to as low as Rs 58150 last week following the selloff in market.