Precious Metals Preview: Gold Eases After Hitting Near Two Week High

COMEX Gold saw good gains yesterday amid broad dollar weakness and signs of steady fund buying. US dollar index fell for a fourth consecutive session today to test its lowest mark in around two weeks. Dollar has been hurt after European Central Bank (ECB) chief economist, Peter Praet, indicated that the central bank could be approaching end to its quantitative easing program. COMEX Gold is hovering at $ 1300 per ounce, almost unaltered on the day. The metal eased after hitting near two week high yesterday. MCX Gold futures broke above Rs 31000 per 10 grams and closed at Rs 31190 per 10 grams, up 1.07% on the day. However, the correction in global Gold should lead to an early drop in the metal today.

Global gold-backed ETF holdings added 15 tonnes to 2,484t in May, according to a latest update from the World Gold Council (WGC). Europe and Asia drove inflows as European funds have responded strongly in the past two months. North American fund flows reversed their early 2018 trend as they lost 2.3% of assets, likely a result of the volatile prices in the gold market which left gold lower by 60bps (in dollar terms) on the month.