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MTECHTIPS:- Gold Consolidates Around $1120 On COMEX

MTECHTIPS:- Gold Consolidates Around $1120 On COMEX

COMEX Gold came off its highs yesterday after strong US housing data. Construction on new US homes edged up in July at the fastest pace since before the Great Recession, indicating that the housing market continues to gain strength. Housing starts edged up 0.2% to an annual rate of 1.21 million last month, the Commerce Department said Tuesday. Permits for new construction, a sign of future demand, slipped 16.3% to an annual rate of 1.12 million though they remain 7.5% higher compared to one year ago. Gold had recorded steady gains earlier in the day but three week highs around $1120 per ounce yet again proved elusive for the commodity. However, the losses were limited and the counter currently trades at $1117 per ounce, little changed on the day. MCX Gold futures ended just above Rs 26000 per 10 grams after testing highs of Rs 26075 per 10 grams. Chinese stocks led decline in global stocks yesterday after China’s central bank took fresh steps to offset capital outflows in the wake of a weaker currency. A deep slide in Chinese stock markets and the concomitant sell off in other equity indices in Asia supported gold today in Asian trades. China’s central bank injected the largest amount of cash into the financial system on a single day in almost 2 years today to ward off concerns about capital outflows following the recent weakening of its currency. In a routine money-market operation Tuesday, the People’s Bank of China offered 120 billion yuan worth of seven-day reverse repurchase agreements, or reverse repos, which are a short-term loan to commercial lenders in the money market. This led to a huge correction in Chinese stocks and the Shanghai Composite closed down more than 6%.

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