Kaloti Precious Metals-Morning Market Report-Tuesday, November 22, 2016

Market Daily & Weekly

Note: Indications only, open and closing prices are bids; Data source: Bloomberg; Times as per Dubai

Fundamentals and News

Gold Futures Rise From Nine-Month Low as Dollar Rally Relents

Gold futures advanced from the lowest since February as the dollar declined, boosting demand for the metal as an alternative asset. Silver slipped, drawing closer to a bear market.

The Bloomberg Dollar Spot Index fell for the first time in four days. Bullion also climbed Monday after its 14-day relative-strength index held below 30, signaling to some traders and analysts that the metal was oversold. Investors fled exchange-traded funds backed by bullion last week by the most in more than three years, data compiled by Bloomberg show.

Gold is recovering after President-elect Donald Trump’s pledge to cut U.S. taxes and boost infrastructure spending helped send the dollar gauge to the highest since January. Trump’s promise to spend as much as $1 trillion to rebuild roads, bridges and airports is bolstering the outlook for growth and inflation, and fueling bets on an interest-rate increase at the Federal Reserve’s final meeting of the year next month.

There’s “bargain hunting into gold,” said James Cordier, the founder of Optionsellers.com in Tampa, Florida.

Gold tumbled to the lowest in more than five months after Federal Reserve Chair Janet  Yellen signaled the central bank may raise interest rates soon, and as climbing global bond yields reduced the appeal of bullion.

The metal for immediate delivery dropped as much as 0.9 percent to $1,205.94 an ounce and traded at $1,207.90 by 9:48 a.m. in Singapore, according to Bloomberg generic pricing. The metal is down 1.6 percent this week after a 5.9 percent loss last week, the most in more than three years, after Donald Trump’s shock win in the U.S. presidential election.

 Gold has plunged as investors digested the implications of Trump’s policies, which may boost the economy and lead to higher borrowing costs. In her first public statement since the election, Yellen told lawmakers on Thursday that the Fed is close to raising rates as the economy continues to gain traction. Reports Thursday showed U.S. housing starts jumped to a nine-year high in October, while jobless claims fell to the lowest level in four decades. Rising bond yields are also weighing on gold, which doesn’t pay interest.

 Investors have been exiting gold. Holdings in bullion-backed exchange-traded funds dropped 8.5 metric tons to 1,940.6 tons as of Thursday, the lowest since July, according to data compiled by Bloomberg.

Data Forthcoming Releases

Courtesy: http://kalotipm.com.sg/kaloti-market-report-22nd-november-2016