Ways2Capital Report Commodity Research 28 September 2015

Gold continued to witness a massive sell off. The yellow metal settled at its lowest price this year, nearing the $1200 per ounce mark and logged its third straight weekly decline.
By: ways2capital
 
INDORE, India - Sept. 28, 2015 - PRLog -- MCX - WEEKLY NEWS LETTERS

INTERNATIONAL NEWS

PRECIOUS METAL


GOLD

Gold continued to witness a massive sell off. The yellow metal settled at its lowest price this year, nearing the $1200 per ounce mark and logged its third straight weekly decline. Other precious metals also dropped heavily amid soaring equities and continued strength in the US dollar. Silver tumbled to a four year low, Platinum fell to a fresh 2014 lows while palladium slumped to a three-month low. Gold fell as the US dollar rallied post the Fed decision where it noted that that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions.

The FOMC noted that it currently judges that there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the Committee decided to make a further measured reduction in the pace of its asset purchases.However, the Fed reassured that a key interest rate will stay near zero for a considerable time after its bond purchases end next month, deferring for now a clear signal on when it will begin to shift away from low-rate policies in place since the 2008 financial crisis. The US dollar broke under 1.2900 mark against the Euro after the Fed statement, testing its highest level against the Euro in 14 months. Dollar also cruised to a six year high against the Japanese Yen and the broad dollar index hit a fresh 15 month high.

Demand worries continue to dominate sentiments for gold. China`s gold imports from Hong Kong in July fell by 42% from a month earlier, according to the Hong Kong Census and Statistics Department, media reports quoted. As per the latest Gold Demand Trends report released by World Gold Council, world gold demand for Q2 2014 was 964 tonnes, down 16%year on year from 1,148 tonnes, central bank purchases rose 28 % year on year, to 118 tonnes from 92 tonnes, total bar and coin demand fell by 56% year on year to 275 tonnes from 628 tonnes, ETF outflows were 40 tonnes, a tenth of the outflows seen in the same period last year.

Gold rose to a two-month peak on Tuesday as equity market, Iraqi insurgency, Weaker Dollar, and soft German business sentiment data and Softer US Data helped bullion build gains. There was a heavy slate of U.S. economic data released Tuesday, including the S&P/Case-Shiller home price index, the monthly house price index, new residential sales, the Richmond Fed business survey, and the consumer confidence index. However, these reports were not big markets-movers. The yellow metal climbed as investors switched out of equities after Germany's Ifo index of business sentiment fell more than expected in June. The German Ifo consumer sentiment survey came in weaker than expected. The Ifo reading was 109.7 in June versus 110.4 in May. A figure of 110.2 was expected. Worries about the Iraq and Ukraine crisis weighed on German consumer sentiment. The downbeat Ifo report adds more weight to the notions that the European Union’s economy remains in serious trouble. This is also an underlying supportive factor for the safe-haven gold market. August Comex gold was last up $1.20 at $1,319.60 an ounce. Spot gold was last quoted up $1.20 at $1,320.00. July Comex silver last traded up $0.135 at $21.15 an ounce.


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