The ECB kept interest rates steady at 1% yesterday
Bank of Japan expects deflation to stretch through 2011
US Initial Jobless Claims fell 38,000 to 550,000 last week
MARKET RECAP
The Bullion pack retreated during yesterday’s trading session as the US Dollar bounced back from its low to rise sharply. Further, the Bank of England stunned markets with a big increase in bond buying to stimulate the economy. Global monetary easing, combined with the recent upturn in economic sentiment, had sent gold sharply higher after the metal was pressured by deflation fears earlier this year.
In the currency market, Euro weakened yesterday as weak equities pressured the currency. The ECB held interest rates steady at 1% and said that the focus will now be on inflation which is expected to rise shortly. These neutral to hawkish comments helped to support the Euro. ECB president also said that the economy is likely to remain weak for the rest of 2009.
In other news, German factory orders rose more than expected in June on the back of robust foreign demand, giving hopes of a rise in industrial production in the coming months. For the day, support is seen at 1.4250/1.4155 whereas resistance is seen at 1.4455/1.4535. The Indian rupee ended flat on Thursday despite RBI buying back papers from traders at much lower than expected yields. Flat prices in the currency were a result of thin volumes due to the bank union strike. For the day, support is seen at 47.50/47.30 whereas resistance is seen at 47.90/48.10.
OUTLOOK
The US is expected to announce economic data on unemployment rate, non-farm payrolls and average hourly earnings today. Over the past few days, there has been positive economic data which has surprised markets. Hence, markets today expect surprises on the unemployment data front. If the data comes on the positive side then the dollar could weaken, thereby providing support to dollar-denominated commodities. Gold prices could continue to receive support on the back of dollar weakness.
On intraday basis, Spot Gold prices have immediate support at $954/$947 whereas resistance is seen at $970/$979. Spot Silver prices shall find support at $14.20/$14.05 whereas resistance is seen at $14.90/$15.10.
MCX October Gold has support at 14840/14700 whereas resistance is seen at 15000/15080. MCX Sep Silver shall find support at 23160/22950 whereas resistance is seen at 23650/23900 levels.
