comex gold intraday

Gold Outlook
29 April 2008 10:22:52



Gold prices edged higher yesterday, as rise in oil price to new record high near $120 levels stirred up inflation concerns. Easing of the dollar against the euro also supported the bullion.



International spot gold traded in the range $885.75 - $895.50 and last quoted at $892.50 ($885.15)



Dollar traded range-bound, with markets awaiting the interest rate decision from Federal Reserve on Wednesday.



The greenback had recovered moderately from the record low levels against the Euro earlier this week, but remained vulnerable due to persisting worries about the US economy.



The University of Michigan/Reuters' consumer sentiment index declined to 62.6 in April from 69.5 in March.



But according to the release by US Labor Department last week, initial claims for state unemployment benefits fell sharply by 33,000 to 342,000 for the week ended April 19, against the expectations for a modest rise. The four week moving average of initial jobless claims fell by 7,250 to stand at 369,500.



Also, continuing claims fell 65,000 to 2.93 million for the week ended April 12. But the four-week average of continuing claims rose 20,500 to 2.96 million to the highest level since May 2004.



However, weakness in the housing market continued, as sales of new homes fell 8.5 percent to a seasonally adjusted annual rate of 526,000 in March as per the report by US Commerce Department.



The National Association of Realtors had reported a 2 % drop in sales of existing single-family homes and condominiums in March, to a seasonally adjusted annualized rate of 4.93 million.



Also, according to the Office of Federal Housing Enterprise Oversight, US home prices fell 2.4 % for the 12 months ending in February.



Earlier, the unexpectedly weak result from the Bank of America had dampened the investors in the banking sector and also added to concerns about the US economy. Bank of America, the second largest bank in US reported a fall in first-quarter profit due to write-downs and rising credit losses.



US consumer confidence had sunk to its lowest level in 26 years in early April, according to a report from University of Michigan/Reuters. The US consumer sentiment index fell to 63.2 in early April from 69.5 in March.



In a separate release, the US Commerce Department revealed the nation's trade deficit expanded unexpectedly by 5.7% to $62.3 billion in February.



As expected, the European Central Bank had left the interest rates unchanged, while the Bank of England cut its benchmark interest rate by 25 basis points to 5 percent in their respective latest meetings.



The minutes from the Federal Open Market Committee meeting held in March had given a downbeat assessment of the US economy, leaving the possibility of further cuts in US interest rates intact. The minutes also showed that many board members believed a recession in the first half of 2008 was likely amid declining economic growth and financial market stress.

Oil prices soared to a new high near $120 a barrel on reported supply disruptions due to strike in a UK refinery, unrest in Nigeria and fresh tensions between the United States and Iran.

Crude oil June in NYMEX traded as high as $119.93 and settled at $118.83 ($118.52).

The US Energy Department had reported Wednesday that US crude inventories rose by a more-than-expected 2.4 million barrels to 316.1 million barrels in the week ending April 18.

OPEC Secretary General Abdullah al-Badri had over-ruled an immediate hike in the OPEC oil output. He also played down the chances that OPEC would hold an extraordinary meeting before its next scheduled gathering in September.

Medium term outlook (Spot Gold)

Weak below $952; supports are $928, $908, $888; resistances $969, $990.



Last day DGCX Gold June traded in the range $889.40 – $898.00 and closed at $894.10 ($888.90).


DGCX Gold June


TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 896; bearish below $ 890

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