COMEX Gold futures jumped to a two week high yesterday as continued weakness in the dollar following the Federal Reserve's cautionary stance on the pace of interest-rate increases this year boosted the sentiments.
A strong support seemed to have emerged around $ 1,200 per ounce levels and the counter currently trades flat around $ 1,226 per ounce.
MCX Gold futures ended around Rs 28,400 per 10 grams, up 1.5 percent on the day after hitting highs above Rs 28,500 levels.
The US dollar index has dropped sharply after the Fed decision. The index is quoting around its six week low levels near 100 as a sharp break under 101 levels has hurt sentiments.
The Federal Reserve on Wednesday raised its benchmark interest rate in response to the improving economy. The Fed has lifted its target rate by a quarter point to a range of 0.75 percent to 1 percent. The Fed said "the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace."
It was the second interest rate in three months, and the first since President Donald Trump's inauguration in January. In addition to offering a modest rate hike, the Fed said it still projects only two more rate hikes in 2017, three in 2018 and three in 2019.
DOW edged up on the Fed mandate after recent string of losses. Overall economic cues are positive and focus would now shift to President Trump yet again.
Meanwhile, a sharp rebound has been noted in local bullion imports. India's Gold imports jumped 14 percent to Rs 23,343 crores in January 2017. Silver imports also soared by 263 percent to Rs 993 crores. Meanwhile, Gems and Jewellery exports rose mildly by 0.6 percent to Rs 26,911 crores last month.
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Technical comment for the day: Copper