IGI Securities Limited – Commodity News

Karachi, March 19, 2019 (PPI-OT): Gold


Gold markets went back as it continue to see a lot of interest in the $1300 level, an area that of course is psychologically important. At this point, to the upside it has a significant amount of resistance at the $1325 level, which is also the bottom of the uptrend line which has been so important recently. That should cause resistance, but if it can clear the $1325 level, the market will more than likely go to the $1350 level, and then beyond that which could open the door to the crucial $1400 level. The market has been bouncing between $1200 on the bottom and $1400 on the top for some time, so is very likely that it will try to get there given enough time. This week is going to be all about the Fed, and what their interest rate outlook is for the remainder of 2019.


Gold prices edged up yesterday as expected the U.S Federal Reserve will be accommodative for the rest of the year weighed on the dollar

Gold is used as a safe investment during times of political and financial uncertainties

Gold has been edging up and the main driver is a softening dollar

The Fed’s decision and Brexit vote could be gold boosters in the short term

A stronger dollar can be a weight on to commodities priced in the unit, making them more expensive to users of other currencies


Gold prices rose for a third consecutive session today as the dollar weakened on expectations that the U.S Federal Reserve will maintain a dovish tone at its monetary policy meeting this week.

U.S gold futures rose about 0.3 percent to $1,304.70 an ounce. The dollar, which eased marginally against major currencies, traded close to a two-week low posted in the previous session.

Investors currently expect there will be no U.S rate hikes this year, and are even building in bets for a rate cut in 2020. If the Fed is more dovish than expected, dollar is likely to move lower, and there is a lot of uncertainty surrounding Brexit with hedging demand for safety.

Spot gold rose 0.3 percent at $1,306.76 per ounce, as the dollar languished near two-week lows hit in the previous session on growing expectations the Fed would shift to a more accommodative policy stance.

Indicative of investor sentiment toward gold, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose about 1.1 percent yesterday, its biggest one-day percentage gain since Jan. 18.

Markets currently expect there will be no rate hikes this year, and are even building in bets for a rate cut in 2020. The dollar index slid 0.2 percent, having posted its biggest weekly decline since early December last week.

The US dollar should remain firm, as the American economy continues to be the best performer relative its peers, gold will face strong headwinds from the broader currency markets.

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