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MTECHTIPS:-MCX Gold Futures Close Above Rs 26000 Mark

MTECHTIPS:-MCX Gold Futures Close Above Rs 26000 Mark

Gold is trading off its three week low in Asia today as stocks managed to hold ground. A turmoil in world equities supported gold impressively in last session. Weakness in Indian Rupee is also providing an excellent support to local gold futures. Asian stocks slipped heavily yesterday and European markets also opened on a bleak note after a raft of weak Chinese data. Markets remained in awe of China’s devaluation of the yuan by nearly 2% on Tuesday as the central bank of China allowed the currency to fall to levels last seen in 2011. 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. Gold has been rallying following these cues, extending its break above $1100 per ounce. Gold soared near three week high though some losses emerged in the counter today and the metal currently trades at $1121 per ounce, down 0.23% on the day. MCX Gold futures for October broke above Rs 26000 per 10 grams and ended above the watershed level yesterday. The INR dropped well beyond 64 per US dollar, testing its two year lows and pushing local gold futures further up. 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
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