Gold prices attained its highest monthly on Thursday as the dollar fell after the minutes of the meeting of the Federal Reserve of the United States suggested lawmakers were in no hurry to raise the interest rates amid data from weak manufacturing China enhanced the case for additional stimulus measures by the central bank of China to revive growth in the world’s second largest economy.
On the Comex, gold for December delivery touched a high at $1,167.80 an ounce, before settling at 1,160.00, up 6.80 or 0.59% on the session. Spot gold rose as much as 1.8 per cent to $1,154 an ounce, its highest since July 15.
In the meantime, investors continue to train for a rise in the interest rates delayed by the Federal Open Market Committee after the publication of the pacifist minutes of its July meeting earlier this week – a development which is regarded largely as bullish for gold.
On Friday, reports from China stated manufacturing output at the national level has declined at the fastest pace in over six years, illustrating the relentless apathy in the factory sector of the nation.
An initial reading of China Caixin flash PMI for August fell to 47.1, its lowest level since the end of the financial crisis. A reading below 50 provides a signal of contraction in the industry. The reading fell considerably beneath forecasts of 47.7 and extended losses analysts 47.8 reading July, when he collapsed to a minimum of two years.
The People’s Bank of China (PBOC) has approved a broad range of incentive initiatives all year round in an effort to boost an economy which is undergoing its slowest growth in more than a decade.
Investors were also followed react at strong signs that the FOMC could slow up much-anticipated interest rates fall further in the midst of soft inflation data. While the Consumer Price Index (CPI) for July rose 0.1%, still it fell under the provisions of a monthly increase of 0.2% of analysts. The core CPI index, which excludes food and energy prices, rose 1.8% on an annual basis, it also falls short of the Fed’s target of 0.2%.
The US dollar fell 0.4 percent against a basket of major currencies, fell as betting the Federal Reserve next month, rising the interest rates in the United States for the first time in nearly a decade after the publication of the minutes of the Fed meeting from 28 to July 29.
Tracking a firming trend overseas coupled with rising demand at domestic spot markets, Gold for delivery in October was sharply up by Rs 351 or 1.31% to Rs 27,200 per 10 gram on MCX.
Spot Gold prices reclaimed Rs 27,000-level after a gap of 2-months of climbing Rs 480 to Rs 27,180 at the bullion market in Delhi, supported by a firm trend in global markets.
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