Gold on MCX settled up 0.12% at 29766 as a retreat in the dollar from highs supported metal prices despite renewed focus on U.S.-China trade tensions. In a closely watched two-day congressional testimony, Federal Reserve Chairman Jerome Powell said he believed the United States was on course for years more of steady growth, and carefully played down the risks to the U.S. economy of an escalating trade conflict. A prolonged U.S. trade war with China and Europe would dent global economic growth and force investors to reassess the profitability of U.S. companies, some of the biggest hedge funds and private equity investors in the United States warned at an investment conference.
U.S. President Donald Trump said on Wednesday the United States may hammer out a trade deal with Mexico, and then do a separate one with Canada later, sowing fresh doubts about the future of the North American Free Trade Agreement (NAFTA). The US housing starts tumbled 12.3% to a seasonally adjusted annual rate of 1.17 million units in June, the lowest level since September 2017. The month-on-month drop marked the sharpest since November 2016, indicating that tight supply is dealing a blow to the housing market. Building permits dropped 2.2% to stand at 1.27 million last months, also the lowest level since September 2017. This compared to the expected 2.2% growth to 1.33 million units. The US jobless claims for the week ended July 14 will be one of the key factors to watch today.
Technically market is under short covering as market has witnessed drop in open interest by -7.5% to settled at 6664, now Gold is getting support at 29676 and below same could see a test of 29586 level, And resistance is now likely to be seen at 29818, a move above could see prices testing 29870.
Trading Ideas:
- Gold trading range for the day is 29586-29870.
- Gold prices gains as a retreat in the dollar from highs supported metal prices despite renewed focus on U.S.-China trade tensions.
- The Fed should ease away from money policy accommodation and raise interest rate to avoid inflation as data showed the U.S. economy has improved in recent months.
- Housing starts tumbled 12.3% to a seasonally adjusted annual rate of 1.173 million units last month, the Commerce Department said.