Gold may regain Rs 28,000 on Chinese factory data
Mumbai-INDIA July 24) Gold saw some profit-booking early on Wednesday in Asian trade but the bulls have a window of opportunity as data showed that Chinese factory output dropped in July.
Initial reading of 47.4 for Purchase Managers Index by HSBC showed that factory output in China in July was at 11-month low, signifying that the slowdown may not have seen the end.
Near-by Japan, too, reported lower exports that also pointed to problems in China.
With the market now having to wait until September for the US Federal Bank to reveal its intentions on the $85-billion-a-month stimulus package, investors have some room to bet on gold rising.
But that could only be just till September. Remember, the market is just waiting for a reason to batter gold.
Other bearish factor for gold is that investors holding gold in electronic form through exchange-traded funds are cashing out. The world’s largest gold fund, SPDR Gold Trust, reported further fall in its gold holdings to 929.76 tonnes.
Spot gold, gold futures
On Wednesday, spot and futures gold markets could glow in view of the Chinese data.
In the spot market gold could try to rise to Rs 28,000 for 10 gm. On Tuesday, gold for jewellery (99.5% purity) ended at Rs 27,720 and pure gold (99.9% purity) at Rs 27,860.
On MCX, October contracts could rise to Rs 27,800.
In Singapore, spot gold ruled at $1,343.58 an ounce and gold futures maturing in December at $1,433.50.
With US stockpiles declining further, crude oil is set to gain further. In early trade, Brent crude quoted at $108.11 a barrel for futures maturing in September and West Texas Intermediate at $107.05.
