Precious Metals Preview: Gold Breaks Above Rs 31K On MCX

COMEX Gold eased in Asia after a near 1.5% jump in last session following a heavy correction in US equities and a slide in Bitcoin futures. US stocks tumbled after a long weekend on trade fears and steep selling in technology stocks. China imposed tariffs on a range of US goods, to retaliate against the Trump administrations penalties on imports of Chinese steel and aluminum. However, Gold dropped on profit selling today as equities stayed almost flat despite the massive slide in US equities and commodities like Crude oil and copper stayed supported. COMEX Gold futures are currently trading at $ 1342 per ounce, down 0.36% on the day. MCX Gold futures should see a mixed opening following this. The local futures ended at Rs 31051 per 10 grams, up 1.60% on the day. The break above Rs 31K can turn critical from near term perspective.

Large metals speculators sharply increased their bullish net positions in the Gold futures markets last week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC). The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 203,354 contracts in the data reported through Tuesday March 27th. This was a weekly surge of 54,623 contracts. With this spurt, the speculative long positions have reversed their recent slide. Overall speculator positions are now at the highest bullish position in nearly two months.

On the economic front, activity in the US manufacturing sector grew at a slower than expected rate in the month of March, according to a report released by the Institute for Supply Management on Monday. The ISM said its purchasing managers index fell to 59.3 in March from 60.8 in February. Activity in Chinas factories expanded at the slowest pace in five months in March, a private gauge indicated, in contrast with official data showing manufacturing activity at a three-month high. The Caixin China manufacturing purchasing managers index dropped to 51.0 in March from 51.6 in February, Caixin Media Co. and research firm Markit said Monday. The 50 level separates an expansion in manufacturing activity from a contraction. New orders grew at the slowest rate in four months, due to muted foreign demand and only a slight improvement in external demand, Caixin said.