Mumbai: The US Federal Reserve meet on Tuesday to decide on inter-bank lending rates is expected to set the price trend for gold here. Gold price on Monday hit a historic high of Rs 13,495 per 10 gm.
“Markets has already discounted a rate cut of 50 basis point, anything above will set the course for pricing pattern,” said Harish Galipalli, head of research, Karvy Commodities.
US Federal Reserve move to cut discount rate it charges commercial banks by 25 basis points to 3.25 per cent pushed up gold and crude oil to new highs.
Gold for immediate delivery climbed $22.04 to $1,024.98 an ounce on the London Metal Exchange after touching an all time high of $1,032.70. Dovetailing gold, silver rose 54 cents to $21.205 an ounce, the highest since March 1980.
Crude oil for April delivery rose $1.59 to $111.80 a barrel on the New York Mercantile Exchange, the highest since trading began in 1983 while Brent crude for May settlement jumped by $1.77 to $107.97 a barrel on London’s ICE Futures Europe Exchange.
Tracking global developments, standard gold in India gained Rs 385 per 10 gm to Rs 13,495, before hitting a new peak of Rs 13,560. Pure gold was also up by Rs 385 per 10 gm to Rs 13,555. Silver moved up by Rs 425 per kg to Rs 25,650.
“The yellow metal was in good demand due to the meltdown of equity market and soaring inflation. The US Fed meet tomorrow will set the future price trend,” said an analyst.
Lower rate
In its first weekend emergency action in almost three decades, the Federal Bank lowered the discount rate to 3.25 per cent. The Fed also will also lend to the 20 firms that buy treasury securities directly from it. Moreover, the Fed will provide up to $30 billion to JP Morgan Chase & Co to help it finance the purchase of Bear Stearns Cos, after the Wall Street’s fifth-largest securities firm was close to declaring bankruptcy.
The Fed decision is aimed at restoring confidence after the collapse of Bear Stearns and over $195 billion asset write-down and credit losses worldwide. JP Morgan agreed to buy Bear Stearns for about $240 million, about 90 per cent less than its value last week.
The dollar dropped to record low against the euro and to a 12 year low against the yen. The dollar fell to £95.78, the weakest since August 15, 1995, before trading at £97.16 in London. Against the euro, the dollar dropped to a record low of $1.5904.
Since gold is a dollar-denominated commodity, any fall in value of the dollar will make it cheaper for other currency investors.
The dollar also hit record lows against the euro in the previous four days as investor confidence tumbled, sending US stocks lower for a third straight week and driving gold to an all-time high.
“Markets has already discounted a rate cut of 50 basis point, anything above will set the course for pricing pattern,” said Harish Galipalli, head of research, Karvy Commodities.
US Federal Reserve move to cut discount rate it charges commercial banks by 25 basis points to 3.25 per cent pushed up gold and crude oil to new highs.
Gold for immediate delivery climbed $22.04 to $1,024.98 an ounce on the London Metal Exchange after touching an all time high of $1,032.70. Dovetailing gold, silver rose 54 cents to $21.205 an ounce, the highest since March 1980.
Crude oil for April delivery rose $1.59 to $111.80 a barrel on the New York Mercantile Exchange, the highest since trading began in 1983 while Brent crude for May settlement jumped by $1.77 to $107.97 a barrel on London’s ICE Futures Europe Exchange.
Tracking global developments, standard gold in India gained Rs 385 per 10 gm to Rs 13,495, before hitting a new peak of Rs 13,560. Pure gold was also up by Rs 385 per 10 gm to Rs 13,555. Silver moved up by Rs 425 per kg to Rs 25,650.
“The yellow metal was in good demand due to the meltdown of equity market and soaring inflation. The US Fed meet tomorrow will set the future price trend,” said an analyst.
Lower rate
In its first weekend emergency action in almost three decades, the Federal Bank lowered the discount rate to 3.25 per cent. The Fed also will also lend to the 20 firms that buy treasury securities directly from it. Moreover, the Fed will provide up to $30 billion to JP Morgan Chase & Co to help it finance the purchase of Bear Stearns Cos, after the Wall Street’s fifth-largest securities firm was close to declaring bankruptcy.
The Fed decision is aimed at restoring confidence after the collapse of Bear Stearns and over $195 billion asset write-down and credit losses worldwide. JP Morgan agreed to buy Bear Stearns for about $240 million, about 90 per cent less than its value last week.
The dollar dropped to record low against the euro and to a 12 year low against the yen. The dollar fell to £95.78, the weakest since August 15, 1995, before trading at £97.16 in London. Against the euro, the dollar dropped to a record low of $1.5904.
Since gold is a dollar-denominated commodity, any fall in value of the dollar will make it cheaper for other currency investors.
The dollar also hit record lows against the euro in the previous four days as investor confidence tumbled, sending US stocks lower for a third straight week and driving gold to an all-time high.
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