Gold bears continue to rule market gets China PMI data push

London (Mar 24)  Gold prices succumbed further extending the bearish trend seen last week as China Purchasing Manager's Index (PMI) and US Fed tapering by another $10 bn per month add further momentum to market bears, analyts said.

US Gold for May delivery almost lost 1% to $1325 on Monday trading after hitting a high of $1391 per ounce last week.

The expectations that US Fed may increase interest rates earlier than forecast and continued tapering measures have eroded safe haven demnand for gold, analysts added.

The HSBC data for March showed a drop to 48.1, compared to a forecast of 48.7 expected and to a final of 48.5 for the previous month. A figure below 50 implies contraction with the the latest number part of a string of disappointing China data suggesting a deepening economic slowdown at the start of 2014.This comes close on the heels of US Fed Reserve announcement of reducing tapering of stimulus by $10 bn to $55 bn per month.

Meanwhile, market will be glued to the developments in Ukraine and hints of possible easing of gold import duty in India which could spur demand for the yellow metal.

From the data releases point of view, US housing data, consumer confidence, durable goods sales will be watched for indications of recovery in US economy.

US CFTC data on Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending March 18.
Net longs totaled 138,429 contracts, up 11.1% from net longs of 123,007 in the preceding week.

At India's MCX Gold for April delivery fell 0.86% to Rs 29473 per 10 grams on Monday trading after having previously settled at Rs 29742 last week. SMC Global has pointed out that gold may remain subdued at MCX on Monday tracking global cues while a stronger rupee will also have impact on investor sentiments.

Source:  Commodity-Online