Gold drifted lower on Friday in Asia as investors remained
cautious ahead of this month's Federal Reserve review of interest rates.
In Vienna, the ECB's Governing Council left interest rates
unchanged ahead of the launch of a highly-anticipated corporate bond buying
program next week, as inflation continues to remain stubbornly low. ECB
president Mario Draghi opened his press conference on Thursday by noting that
the Governing Council expects interest rates to remain low for a lengthy
period, but did not add whether it plans to extend a comprehensive quantitative
easing program beyond next March. While Draghi left the possibility open for
further easing measures, he reiterated the ECB's main goal is to make sure that
long-term inflation returns back toward its targeted objective. Economists from
the ECB raised their growth forecasts in the euro area by 0.2 to 1.6% for 2016,
while leaving their projection for 2017 growth unchanged at 1.7%. The
ECB's decision could prompt the Federal Open Market Committee (FOMC) to raise
short-term interest rates when it meets next on June 14-15.
Some hawkish members of the Fed have been hesitant to lift
rates as the ECB and the Bank of Japan continue to maintain a negative interest
rate policy. The FOMC has left the target range of its benchmark Federal Funds
Rate at a level between 0.25 and 0.50% in each of its first three meetings this
year. In December, the FOMC abandoned a seven-year zero interest rate policy by
lifting rates for the first time in nearly a decade.
Any rate hikes by the Fed this year are viewed as bearish
for gold, which struggles to compete with high-yield bearing assets in rising
rate environments.
Also in Vienna, OPEC ended its semi-annual meeting without
reaching an agreement to cap its production ceiling. While Saudi Arabia pledged
to resist the temptation of flooding global energy markets with a glut of
supply, Iran offered few hints that it will slow production in the coming
months. Crude prices have fallen sharply since OPEC allowed production to
exceed 30 million barrels per day in November, 2014, leading to a prolonged
rout in global oil prices.
Gold
Support at 28780---28730 and Resistance at 29150---29240
Break and sustain below 28820 will take to 28780---28730.
Weekly close below 28730 will see free fall in Gold else it could test its
resistance level of 28950---29080 and then to 29240 mark
Three consecutive closes + weekly close above 29240 will see
sharp upside rally in it.
Trade with levels only
Silver
Support at 38250 and Resistance at 38800---39200
Fresh selling can initiate only weekly close below 38250
mark. Three consecutive closes + weekly close below 38250 will see free fall in
days to come else it could test its resistance level of 38800---39200 again
Further upside rally will see only close above 39200 mark
Trade with levels only
More will update soon!!
