PRECIOUS METALS Gold & Silver prices are likely to witness selling pressure going forward after the Fed said that the U.S. economy is expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year which triggered selling in Gold and Silver prices and pushing further the treasury yield to the 15 month high at 2.47% yesterday and the strength in dollar. Fed sounded more optimistic on the US economy and boosted their outlook on GDP to 3.0% to 3.5%, versus a 2.9% to 3.4% estimate made in March. Unemployment is seen falling to 6.5% to 6.8%, versus an earlier projection of 6.7% to 7.0%. Quantitative easing was one of the appeals of Gold, especially since 2008, and now the US central bank are going to slow the pace of monetary easing is not a good signal for gGld.” “There’s definitely a bearish sentiment in the market” following the Fed outlook and one should maintain the sell on strategy in gold and silver for the day. Other bad news for gold came from overnight reports that said Indian imports of gold will decline by 30% due to recent Indian government taxing measures meant to reduce the country’s trade imbalance. Bernanke said the pace of the bond buying programme to be reduced moderately by the end of this year if the subsequent data remain broadly aligned with our current expectations for the economy and ending the bond purchases by the mid-year of 2014. Maintain sell on rise strategy in Gold and Silver prices.
Posted on: Fri, 21 Jun 2013 06:08:20 +0000
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