Gold slips as investors prefer safety of dollar
· Gold prices edged lower on Thursday as investors opted for the safety of the dollar after the U.S. Federal Reserve flagged concerns about the pace of recovery in the world’s largest economy.
· Fundamentals
Spot gold eased 0.3% to $1,839.21 per ounce by 0042 GMT. Prices fell to their lowest since Jan. 18 at $1,830.80 on Wednesday. U.S. gold futures shed 0.5% to $1,835.90.
· The dollar hit a more than one-week high against rival currencies in the previous session. A stronger dollar makes gold more expensive for holders of other currencies.
· The Fed on Wednesday left its key overnight interest rate near zero and made no change to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession.
· Some U.S. states are starting to ease public health restrictions as severe Covid-19 infections are beginning to abate in many parts of the country even as the death toll mounts.
· Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.3% to 1,169.17 tonnes on Wednesday.
· Analysts and traders have downgraded their forecasts for gold but still expect prices to recover from current levels and many see it achieving record highs this year.
· India’s gold demand down 35 pc to 446.4 tonne in 2020; rebound in 2021 likely
India's gold demand dropped by over a third in 2020 settling at 446.4 tonne on the back of pandemic-induced lockdowns and lifetime high prices, but a rebound this year is most likely, as normalcy returns and steady course of reforms strengthen the industry, according to the World Gold Council (WGC).
India’s gold demand dropped by over a third in 2020 settling at 446.4 tonne on the back of pandemic-induced lockdowns and lifetime high prices, but a rebound this year is most likely, as normalcy returns and steady course of reforms strengthen the industry, according to the World Gold Council (WGC).
India’s gold demand fell by 35.34 pc to 446.4 tonne in 2020. In 2019, the total gold demand was 690.4 tonne, according to the WGC’s 2020 Gold Demand Trends report.
· India's gold jewellery demand down 42% in 2020 to 315.9 tonnes: WGC
Total investment demand for 2020 was down by 11 per cent at 130.4 tonnes in comparison to 145.8 tonnes in 2019, according to WGC's latest Gold Demand Trends report
· India's gold demand hits 25-yr low in 2020 amid lockdowns, high prices: WGC
· GOLD TECHNICAL ANALYSIS
Gold prices are attempting to break under the longer-term 200-day SMA. With confirmation, that could spell a rough road ahead for XAU/USD. However, a rising range of support from March 2020 seems to be keeping the focus tilted to the upside – see chart below. A bounce off immediate support (1802 – 1822) may place the focus on the January 20th, 2021 high at 1875.
· Silver lost 0.2% to $25.18 an ounce, platinum fell 0.2% to $1,063.76, and palladium was flat at $2,304.81.
· Platinum will burst from a decade-long stagnation this year as demand from investors and auto makers delivers the biggest annual average price rise since 2010, a Reuters poll showed.
Reference: CNBC, WGC, Financial Express, DailyFX
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