Gold rebounds, yet probably is heading for a weekly decline
Gold rebounded on Thursday trading, paring some of the losses recorded in the previous two sessions, yet it may come under pressure heading for a weekly decline after the Fed comments signaled that probably there will be not further quantitative easing.
The shiny metal is now facing some downside pressure with the lower possibilities of seeing quantitative easing, unlike last year, as the dollar is gaining ground and inflation is not posing a threat on recovery.
The yellow metal is currently trading around $1629.60 an ounce where it rebounded after touching a low of $1612.18 yesterday which pushed it up to touch a high of $1630.08 while the day's low was seen at $1619.87.
Minutes of the fed meeting showed that policy makers have fewer tendencies to expand non-standard measures with the gradual improvement in U.S. data which is giving signs the world's largest economy is on the right track towards recovery.
Also, the Bank of England is predicted to keep its stimulus on hold at 325 billion pounds this month.
Later in the day, U.S. initial jobless claims record a decline to 355,000 in the week ended March 31 from 359,000 a week before, yet tomorrow the awaited non farm payrolls report will witness a drop in hiring to 205,000 in March from 227,000 in February.
With fewer chances of seeing quantitative easing, gold is losing its merit as an inflation hedge.
On the other hand, the U.S. dollar did a downside correction today after advancing sharply over the previous two sessions; the dollar index is currently hovering near 79.66 compared with the day's opening of 79.74, where it surged yesterday after the breach of strong resistance at 79.50 which represents SMA 100 level.
In the physical market, Indian's jewelers closed their shops to protest on a new tax, thus lowering demand from the world's biggest bullion market.