Gold prices hit on Fischer comments, silver down more than 2%
Gold fell further in Asia on Monday and silver dropped
sharply as investors noted comments by Federal Reserve Vice Chair Stanley
Fischer that
appeared to raise prospects for a near-term rate hike by the Federal Reserve.
The Fischer comments come ahead of a highly anticipated
speech by Fed Chair Janet Yellen at the annual meeting of top central bankers
and economists in Jackson Hole, Wyoming, seen as offering fresh clues on the
timing of the next U.S. rate hike.
Gold prices ended Friday's session deep in negative
territory, as investors digested a fresh batch of comments from key Federal
Reserve policymakers on the possibility of a near-term interest rate hike by
the U.S. central bank.
Gold continued to face resistance at
highest levels amid profit selling, elevated equities and a modest rebound in
the US dollar. Poor Indian demand also played its part in keeping Gold under
check.
However, the broad investment demand
remains strong and the recent spike in oil prices is also likely to prove
supportive for Gold. The COMEX Gold futures edged up above $1360 per ounce in
the middle of this month but flipped back as quick gains in US dollar hurt the
sentiments for precious metals.
Dollar edged up from its six week low of
1.1370 against the Euro after the Conference Board released a report showing
that its index of leading US economic indicators rose for the second
consecutive month in July. The Conference Board said its leading economic index
climbed by 0.4% in July following a 0.3% increase in June. This pulled COMEX
Gold down to below $1340 per ounce mark.
The minutes of their July
26-27 meeting showed that officials were encouraged by a rebound in job growth.
They also took note of a stabilization of financial markets after a bout of
turbulence triggered by Britain's June 23 vote to leave the European Union. The
Fed officials believed those developments had lessened the risks for the
economy in the short run.
The minutes show that as a result, the officials
thought a rate increase was or would soon be warranted. But a key factor
holding the Fed officials back was the stubbornly slow rate of inflation, which
has been running below the central bank's 2% target for more than four years.
Technical Levels
Gold
Told to sell around 31400 with stop loss of 31600. It crashed
and made a low of 31212
Now what to expect???
Break and sustain below 31200 will take to
31130---31080---31000. Two consecutive closes below 31000 will see more
downside panic till 30700---30600 mark.
30600 act as major support in Gold
Else it could test its resistance level of 31330 and then to
31450---31600 mark
Trade with levels only
Silver
Crashed vertically and made a low of 44501. We clearly indicated
that 45400 act as last and crucial support
Silver formed double top pattern on daily chart and breakout
point is 45400
Three consecutive closes + weekly close below 45400 will take to
43800---43300 and then to 42300
Any sharp rise will be selling opportunity in Silver for the
downside target of 42300
Hurdle and stop loss above 47300 (For positional traders)
