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MTECHTIPS;-Gold Holds Above $1100 Amid Unrest In Equities

MTECHTIPS;-Gold Holds Above $1100 Amid Unrest In Equities

Weakness in Indian Rupee and the latest spurt in COMEX Gold are providing an excellent support to local gold futures. Global equities shuddered after China’s central bank devalued the yuan by nearly 2%, allowing the currency to fall to levels last seen in 2012, in an effort to make the country’s exports more competitive and boost the economy amid lackluster growth. This measure has caught the market men off guard as a slowing Chinese economy can have drag the global growth rates lower in coming quarters. However, gold has been rallying following these cues, extending its break above $1100 per ounce. Gold soared near three week high, testing $1120 per ounce though it came off the highs in NY trades. Gold stayed under pressure last week but witnessed sustained support around five and half year lows amid strong US gold coins demand and bargain buying. Traders are also becoming wary of the global miners responding with production cuts if gold falls further from hereon. Stanley Fischer, the vice chairman of the US central bank stated Monday that the US Federal Reserve is concerned about low inflation and won’t move before it sees inflation returning to more normal levels. This boosted gold, keeping a tab on the US dollar. DOW recorded massive losses in last session and equities around Asia are in red. This should keep gold afloat. COMEX Gold is currently trading at $1110 per ounce, up 0.21% on the day as the stocks in Europe stay in deep red. MCX Gold futures soared above Rs 25500 per 10 grams yesterday. The INR dropped towards its two month low near 64.30 per US dollar, keeping MCX Gold well supported. The counter ended at Rs 25426 per 10 grams and can
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