Gold
Spot gold prices plunged by 1.3 percent on Tuesday to close at $1140 per ounce after China’s efforts to stabilize its economy brought some respite to global markets post Monday sell off. China's central bank cut interest rates and reduced the amount of reserves banks must hold for the second time in two months on Tuesday amid a stuttering economy and a plunging stock market that has sent shockwaves around the globe.
Also, upbeat U.S. data reflected consumers’ view of the U.S. economy improved in August and better feelings about the labor market, tempered investor interest in haven assets. U.S. consumer confidence hit a seven-month high in August and new single-family home sales rebounded in July.
However, Net gold imports from Hong Kong rose nearly by half to 55 tonnes last month from 37 tonnes in June, according to Hong Kong Census and Statistics Department.
On the MCX, gold prices fell by 2.6 percent to close at Rs.26936 per 10 gms.
Silver
Spot silver prices declined by 0.6 percent to close at $14.7 per ounce in line with weakness in gold prices. Also, strength in the dollar index acted as a negative factor.
On the MCX, silver prices declined by 2.2 percent to close at Rs.35447 per kg.
Outlook
On an intraday basis, we expect gold and silver prices to trade sideways as Chinese rate cut did not have as sustained impact with Asian equities again trading lower. Also, investors will be cautious ahead of US GDP data release due tomorrow.
On the MCX, gold prices are expected to trade sideways today.
Contributed by Angel Broking
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