Fed progresses fast towards tightening the monetary policies: Angel Commodities Broking

Bullion Monthly Report by Mr. Prathamesh Mallya (Chief Analyst - Non-Agri Commodities & Currencies, Angel Commodities Broking):

"Prices trended downwards for most of June in anticipation of the rate hike by the US FED in its meeting which was scheduled on 13-14th June 2017. The FED actually hiked the rates by 25 bps to 1-1.25 percent and the talk of normalization of balance sheet size of $4.5 trillion relatively sooner is what led to the fall in gold.

Rising interest rate scenarios, weak investment demand, and optimism about the US economic growth and hints from leading central banks to end the era of easy money policy spells trouble for gold prices. Although, dollar index is standing at nine month lows, it is not really offering any support for precious metals.

GST in India would be game changer in the long run, however, short term distortions towards the complexity of the tax structure will lead to slow demand for gold in the near term.

We expect gold prices to trade lower towards $1180 mark in the near term, while MCX gold price (CMP: Rs.28400/10gms) is headed lower towards Rs.27400 mark."

Source : Equity Bulls

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