Gold fell as the dollar index remained close to two-month highs of over 104

Gold yesterday decreased -0.18% to 59353 as the dollar index stayed close to two-month highs above 104, helped by rising predictions that US interest rates may stay high for longer than originally predicted. Market expectations were higher than the most recent PCE inflation data, which raised the possibility that the Federal Reserve would retain its hawkish posture and keep interest rates high for an extended length of time.

In addition, personal expenditure surged more than forecast and durable goods orders rose more than anticipated. The White House and Republicans appeared to have narrowed their disagreements, and it appeared like the debt agreement would be completed before the deadline. For the first time in close to three months, physical gold became more expensive in India as buying was stimulated by declining domestic prices and the central bank’s decision to remove the biggest denomination notes.

In contrast to last week’s discount of $5, Indian dealers were now levying an additional fee of up to $3 per ounce over domestically recognized pricing. Gold traded at premiums of $2 to $6.50 to the worldwide price, which was expected to decline for a third consecutive week, in the world’s largest consumer of the metal, China. Turkey embarked on a selling binge, dumping 81 tonnes in April and 15 tonnes in March, after purchasing more gold than any other central bank in 2022.

Technically, the market is in long liquidation as evidenced by the market’s drop in open interest of -39.45% to close at 3805 while prices are down -107 rupees. Currently, Gold is receiving support at 59166, and a move below that level could result in a test of the 58978 levels, while a move above that level could result in a test of the 59848 levels.

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