Gold prices to trade lower:
Spot gold prices traded lower by 0.4 percent yesterday to close at $1276.3 per ounce as stronger US stock markets dimmed safe haven metal prospects . Also, global investors anxiously await decision on the next F e d head after President Trump on Monday said he was “very , very close” to making his decision on who should chair the U.S. central bank. Gold prices have already been under pressure in the past few sessions as dollar hit one month highs after the US Senate approved a budget resolution for the 2018 fiscal year. Dollar gained further momentum following Japanese Prime Minister Shinzo Abe’s election victory at the weekend since it affirmed continuation of ultra – loose monetary policy. Further, latest CFTC data showed Hedge funds and money managers cut net long positions in COMEX gold contracts for the fifth straight week in the week to Oct. 17. On the MCX, gold prices traded flat to close at Rs. 29589 per 10 gms.
We expect gold prices to trade lower as decision of the next Fed chair will be the focus amidst absence of any geopolitical tensions. Besides, the passage of budget blueprint is seen as a step towards Trumps’ planned tax cuts, thereby providing strength to the DX. On the MCX, gold prices are expected to weaken further today, international markets are trading 0.3 percent lower at $ 1273.1 peroz.