The Reserve Bank of India Thursday surprised the market by cutting repo rate by 25 basis points to 7.75 percent from 8 percent, with immediate effect, head of its policy review on February 3
“Households’ inflation expectations have adapted, and both near-term and longer-term inflation expectations have eased to single digits for the first time since September 2009. Inflation outcomes have fallen significantly below the 8 per cent targeted by January 2015. On current policy settings, inflation is likely to be below 6 per cent by January 2016,” the RBI said in arelease on its decision to cut the benchmark rate.
In early trade, gold opened with a decline to hit $1224 in the international market translating thereby the lower level of Rs 26700 per 10 grams in spot domestic trade. But, following the Reserve Bank of India (RBI)'s surprise move to cut repo rate by 25 basis points to 7.75%, the rupee ended with a marginal appreciation of 0.07 to 62.07 against the dollar. After opening at 61.89, the Indian currency slipped to 62.14 but appreciated again to touch the high of 61.48 during Thu
rsday trade.
"No doubt currency market's turbulence had supported the gold prices well in last few weeks and helped the metal prices to hold above Rs 27,000 mark. Fundamentals, however, continued to remain negative as investors remained bullish towards dollar. Gold may see a price testing close to Rs 27500-27800 per 10 grams range in short term while medium term outlook still remain weak to re-test Rs 25000 - 25500 range," said Ajay Kedia, managing director, Kedia Commodity.
“Households’ inflation expectations have adapted, and both near-term and longer-term inflation expectations have eased to single digits for the first time since September 2009. Inflation outcomes have fallen significantly below the 8 per cent targeted by January 2015. On current policy settings, inflation is likely to be below 6 per cent by January 2016,” the RBI said in arelease on its decision to cut the benchmark rate.
In early trade, gold opened with a decline to hit $1224 in the international market translating thereby the lower level of Rs 26700 per 10 grams in spot domestic trade. But, following the Reserve Bank of India (RBI)'s surprise move to cut repo rate by 25 basis points to 7.75%, the rupee ended with a marginal appreciation of 0.07 to 62.07 against the dollar. After opening at 61.89, the Indian currency slipped to 62.14 but appreciated again to touch the high of 61.48 during Thu
rsday trade.
"No doubt currency market's turbulence had supported the gold prices well in last few weeks and helped the metal prices to hold above Rs 27,000 mark. Fundamentals, however, continued to remain negative as investors remained bullish towards dollar. Gold may see a price testing close to Rs 27500-27800 per 10 grams range in short term while medium term outlook still remain weak to re-test Rs 25000 - 25500 range," said Ajay Kedia, managing director, Kedia Commodity.
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