Gold gained to $1265.59 on 23rd Jan, highest after 11th December, keep rally continues on second day due to weak U.S. economic data. Dollar Index, a measure of dollar against 10 major currencies, slid from 81.26 to 80.42 yesterday.
The metal gained with the fall in stock market prices. With the contraction in China Manufacturing PMI many of Asian stocks fell that diverted investment flow towards precious metals.
But on the other side there are also chances of fall in prices if physical buyers withdraw their money at higher prices. This has already happened when prices reached near to $1260 on 20th December.
According to CNBC Awaaz Congress President Sonia Gandhi wrote a letter to the commerce ministry seeking lower import duty on Gold. The news boost up the metal prices at domestic market.
Investors should be cautious on coming Fed meet. According to many analysts the committee may continue to trim the bond buying program that may further deepen the metal prices.
We are expecting that weak equity market may keep Gold in demand but Fed fear may subdue precious metal prices.