Gold on MCX settled up 0.09% at 31939 as the dollar fell after data suggested an acceleration of U.S. growth was driven by temporary factors that are likely to reverse in the coming quarters. Even strong data out of U.S. was unlikely to change the U.S.
Federal Reserve’s monetary strategy. Major central banks are done tightening policy as the global growth outlook has softened across developed and emerging economies, with scant prospects for a surge in inflation.
The view is supported by a recent slashing of its growth outlook by the Bank of Canada and a disclosure from the Bank of Japan that it will keep interest rates super-low for at least one more year. Central bank gold purchases have been running strong this year, which could support prices.
Physical gold demand was healthy this week in India in the run up to a key festival and with the wedding season underway, while other top Asian hubs saw steady interest in bullion as global prices recovered from a 2019 low touched earlier in the week. In India, dealers charged a premium of up to $2 an ounce over official domestic prices, down from last week's premium of $2.50, the highest in nearly five months.
India's gold smugglers have slowed their operations over worries their shipments will be caught up in seizures of cash, bullion, booze and drugs aimed at controlling vote-buying in the country's national elections. Technically market is under short covering as market has witnessed drop in open interest by -3.43% to settled at 13053 while prices up 28 rupees, now Gold is getting support at 31800 and below same could see a test of 31660 level, And resistance is now likely to be seen at 32038, a move above could see prices testing 32136.
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