Gold & Silver

Gold prices open weak as CME gold shows signs of weakness

Our Bureau Ahmedabad | Updated on December 02, 2019 Published on December 02, 2019

Representative image   -  Reuters

Spot price outlook remains subdued tracking weakness in futures

Gold prices moved negative on futures, hinting at a continued weakness in the spot markets at the opening of the week on the first trading day of December.

MCX Gold futures for December contract opened negative on Monday to trade at Rs 37,901 per 10 grams and traded with loss of over 130 points reflecting the global weakness.

On Friday, spot gold stood at Rs 38019 per 10 grams as quoted by India Bullion and Jewellers Association (IBJA) for PM rates (for 999 purity without taxes).

Angel Broking in its International Commodity Report on Monday stated that spot gold had moved marginally up by 0.3 per cent during the last week, while the outlook for the MCX Futures appeared negative. "Gold prices are expected to trade lower today, international markets are trading lower by 0.47 per cent at $1465.75 per ounce," it stated.

CME Gold futures for December quoted at $ 1458.3 an oz on Monday down $7.3 from previous close.

"Mixed signals over ending the prolonged trade war between US & China weighed on the market sentiments. Both the nations have progressed towards the phase one trade deal which could be the first step towards ending the 16-month long trade war," an Angel Broking note said.

However, the optimism over a possible trade deal soon faded away after United States (US) President Donald Trump signed a legislation supporting Hong Kong protesters. China in turn threatened the United States that it would "firm counter measures" in retaliation of the US interference.

According to Dinesh Thakkar, CMD at Tradebulls, gold prices rallied nearly $10 per ounce against a weak US Dollar as worldwide equity markets saw some pullback on November 29, Friday. The movement in the yellow metal is backed by international developments where Japan's industrial output shrank 4.2 per cent last month from September while South Korea also saw its industrial output shrink 2.5 per cent in October which was the reason for pullback in equity markets and rally in gold.

"Major government bond prices also rallied in the meantime, erasing a slight rise in longer-term US interest rates higher. Gold has limited downside because of $ 12.5 trillion worth of negative yielding debt. Today we expect gold prices to come near its support area of Rs 37,720 in MCX before it stages recovery," Thakkar stated.

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Published on December 02, 2019
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