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MTECHTIPS:- Gold Sparkles After Slightly Downbeat FOMC Minutes

MTECHTIPS:- Gold Sparkles After Slightly Downbeat FOMC Minutes

A slightly downbeat undertone in the latest US FOMC minutes boosted gold sharply yesterday. The COMEX Gold futures witnessed a radial jump after a brief consolidation in last few days as $1120 mark was broken in a flash. Dollar weakened slightly and traders increased their bullish stakes in COMEX Gold, making the metal extend its rally above $1100 per ounce as the FOMC July meeting minutes noted that the staff’s forecast for inflation was revised down, particularly in the near term, as the decline in crude oil prices over the inter meeting period was expected to result in lower consumer energy price. This took gold up as it indicated that the FOMC might want to see a more clear evidence that prices are edging up before initiating the much anticipated rate hike. Gold has continued to jump today as well, rallying near a six week high of $1140 per ounce as Asian equities traded mixed. The metal is rising despite drop in crude and copper and tepid moves in equities, indicating that a bottom might have formed around its five year low mark. MCX Gold futures for October ended near Rs 26200 per 10 grams amid continued buying support and could extend these gains further today given the strong momentum in global prices. The FOMC minutes noted yesterday that US financial conditions were affected by developments abroad over the inter meeting period but were little changed on balance. Federal Reserve communications and economic data releases, including the June employ-ment report and retail sales data, put some downward pressure on the path of expected future short-term in- te rest rates. On net, 5-year and 10-year Treasury yields were somewhat lower, measures of inflation compe nsa-tion over the next 5 years based on Treasury Inflation-Protected S

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