Tuesday, 15 November 2016

Commodity Market -- Gold may Touch Rs 29,000

Gold may touch Rs 29,000 in next 1 month; here is why
Gold rebounds after sinking to near 6-month low
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Gold prices fell for the third consecutive day on Tuesday on rising fears that calendar year 2017 may see aggressive rate hikes by the US Federal Reserve as the US economy stabilises. Within a span of three sessions, the yellow metal had slipped 4 per cent from Rs 30,875 per 10 gm on November 9 to Rs 29,911 per 10 gm till November 11 after Republican nominee Donald Trump was elected the 45th President of the US.  

The development pushed the US dollar higher and resulted in soaring US Treasury bond yields. Trump's fiscal and trade policies are largely expected to stoke inflation and make it easy for the Fed to hike interest rate. Under the prevailing scenario, bullion experts see further weakness in gold prices at least over the next one month.  

At home, the government is keeping an eye of sales of the yellow metal that can be broken down into sub-Rs 2 lakh to avoid quoting of PAN. After the demonetisation of Rs 500 and Rs 1,000 currency notes, gold and bullion as a whole are said to have become the favoured route for laundering ill-gotten wealth.  

According to SMC Investments and Advisors, the bullion counter can continue to witness a lot of volatility as uncertainty over the Fed interest rate hike and movement of the greenback are expected to provide further direction to gold prices. Donald Trump winning the US presidential election spurred global stock markets and reduced safe haven buying of gold.

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