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MTECHTIPS:-Gold Under $1140 After Latest Correction

MTECHTIPS:-Gold Under $1140 After Latest Correction

MCX Gold futures traded in a mixed manner today after a heavy tumble yesterday. Rockyfinancial markets had taken the yellow metal above $1160 per ounce- making it hit sensitive week highs. However, the metal fell dramatically yesterday after China ’sefforts to stabilize its economy and upbeat US data tempered investor interest in havenassets. A massive selloff in DOW in late session offered some solace to the metal but the counter ended down more than 1% on the day, ending under $1140 per ounce mark. The counter is quoting at $1137 per ounce right now, down 0.11% on the day. MCX Gold futures, tumbleweed heavily yesterday, breaking under Rs 27000 per 10 grams mark, are trading almost-unchanged at Rs 26763 per 10 grams right now. The US Conference Board said its consumer confidence index jumped to 101.5 in August-from 91 in July. After reporting a sharp drop in U.S. new home sales in the previous-month, the Commerce Department released a report on Tuesday showing a notable rebound in sales in the month of July. The report said new home sales jumped to an annual rate of 507,000 in July, 5.4% above the revised June rate of 481,000. US stocks ended sharply-lower following a late selloff as buyers lacked the conviction and strong US data yetagain fuelled worries about the Fed rate hikes. Gold is expected to move lower following this. The strong US data boosted expectoration the US economy may be strong enough to allow the Federal Reserve to increase-borrowing costs next month. Higher interest rates tend to be unfavorable for gold, which-pays its holders nothing and struggles to compete with yield-bearing investments when-borrowing costs increase.
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