The COMEX Gold futures edged up above $1360 per ounce in the middle
of this month but flipped back as quick gains in US dollar hurt the
sentiments for precious metals. Dollar edged up from its six week low
of 1.1370 against the Euro after the Conference Board released a
report showing that its index of leading US economic indicators rose
for the second consecutive month in July. The Conference Board said
its leading economic index climbed by 0.4% in July following a 0.3%
increase in June. This pulled COMEX Gold down to almost $1340 per
ounce mark. MCX Gold futures for October moved mostly in a sideways
range, with highs above Rs 31500 per 10 gram levels constantly
triggering selling pressure. The US Federal Reserve officials
believed last month that near-term risks to the U.S. economy had
subsided and that an interest rate increase could soon be warranted.
But they did not indicate when they would likely raise rates. The
minutes of their July 26-27 meeting showed that officials were
encouraged by a rebound in job growth. They also took note of a
stabilization of financial markets after a bout of turbulence
triggered by Britain's June 23 vote to leave the European Union. The
Fed officials believed those developments had lessened the risks for
the economy in the short run. The minutes show that as a result, the
officials thought a rate increase "was or would soon be
warranted. But a key factor holding the Fed officials back was the
stubbornly slow rate of inflation, which has been running below the
central bank's 2% target for more than four years.
Indian Gold demand witnessed a lackluster performance over last few
months. An extended strike by Jewelers and elevated price saw
consumer demand for gold in India drop 18% year-on-year to 131 tons
in the second quarter of calendar year 2016 (Q2CY16), according to
the latest World Gold Council (WGC) report on gold demand trends for
the second quarter of 2016. The five year average for local Gold
demand is 219 tons. In dollar terms, the demand stood at $5304
Million, down 13% on year.