MCX gold opened weak at Rs 28,570 per 10 grams against Wednesday’s close of Rs 28,602. It may continue its downward trend and touch the Rs 28,500 level later in the day.

The yellow metal may trade weak on Thursday in both the domestic spot and futures markets with the euro holding fort against the dollar. Fears of the euro zone slipping into a deeper debt crisis have eased.

Spain's debt problems seem to be resolving after the European Central Bank Executive Board Member, Mr Benoit Coeure, hinted at buying bonds from the market. The move will pump in fresh liquidity into the system. A stable euro will provide some support to gold. However, investors remain cautious on its outlook and await more clues on future growth in the euro zone.

Traders expect gold prices to consolidate at current levels after the recent rally lifted prices from a near three-month low. The rally came on the back of expectations of another stimulus by the US Fed.

Spot gold was little changed at $1,658.51 an ounce. However, one needs to keep an eye on rupee movement against dollar.

Goldman Sachs Group Inc recently cut its three-month outlook on commodities to neutral from overweight. It said that most raw material prices have reached its targeted price levels on the upper side following improved demand. Prices may soften in the second quarter, it said.

The International Monetary Fund on Tuesday indicated that the commodity exporting countries may face the risk of lower prices in the coming months.

The Standard & Poor’s GSCI (formerly Goldman Sachs Commodity Index) index of 24 raw key materials has lost 1.3 per cent in April, eroding most of the 6.8 per cent gains recorded in the first quarter ended March.

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