- Mid-session commentary
Gold Dips But Not Much
Gold Dips But Not Much
Gold futures dipped a bit in the mid Asia electronic session today, however the counter remained supported on strength in the equities.
On the economic front today, the euro slipped against the U.S. dollar and some other currencies Tuesday after Moody’s stripped France of its AAA credit rating, drawing attention back to Europe’s ongoing debt and growth troubles.
Meanwhile, Bank of Japan left its policy interest rate and the size of its asset-purchase program unchanged, as widely expected in the wake of an expansion to the central bank’s easing moves at its last two meetings.
In currencies, the ICE dollar index, which measures the greenback’s performance against a basket of six other major currencies, rose to 80.862 from 80.854 in late North American trade Monday. The euro slipped to $1.2795 from $1.2816, and to 103.97 yen from ¥104.17, surrendering some of the gains recorded against the U.S. and Japanese currencies the previous day. The U.S. dollar was fetching ¥81.28 by late afternoon in Tokyo, down slightly from ¥81.38 in North American trade Monday.
December dated gold futures are trading down nearly $2 at $ 1732.6 an ounce on COMEX division of New York Mercantile Exchange. The counter may find a support near $1725 levels today and a break of that may change course for the metal.
In the week ahead, key October housing indicators will be released such as existing home sales, housing starts, and building permits. The November NAHB housing market index and weekly mortgage applications are also due later this week. These data releases are becoming increasingly important as the Fed appears more concerned with the housing market to seek improvement in economic activity and the labor market.
Traders will also closely watch for an extraordinary meeting of Europe's finance ministers to specifically discuss Greece will take place in Brussels on Tuesday at 1600GMT/ 1100ET. There is a lot of pressure on the ministers to agree to disperse Greece's next tranche of bailout funds. There are two things to look out for in Tuesday's meeting: 1, If Greece gets its next tranche of cash and 2, if the finance ministers' agree on how to reduce Greece's debt load to 120% of GDP by 2020 as the IMF has requested.
However, MCX December gold futures are traded up, bucking the trend in the international futures. It traded up nearly Rs 85 at Rs 31785 per 10 grams. The traders may buy it with the target of RS 31825 and Rs 31870 with the stop loss at Rs 31755 levels.
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