comex gold intraday

Gold Outlook




Oil’s rally to new highs and moderate weakness in the dollar pushed up gold prices yesterday to above $880 levels.



International spot gold traded in the range $863.25 - $885.25 and last quoted at $882.30 ($867.15).



The Euro strengthened against the dollar after the European Central Bank announced the decision to keep its interest rate unchanged in a policy meeting yesterday. The ECB decided against a rate cut giving due consideration to the high inflation, which is currently above the target rate.



Weak retail sales data from the Euro zone released on Wednesday had affected the European currency movement in the previous day. The Eurostat release had shown Euro zone retail sales fell 0.4 percent in March from February, down 1.6 percent year-on-year.



In a slightly positive signal from the Labor sector, the initial jobless claims in US fell by 18,000 to a seasonally adjusted 365,000 in the week ended May 3, according to the release by US Labor Department.



The Labor Department had reported on Wednesday that the productivity of the US non-farm business sector rose at a 2.2% annual rate during the first months of the year.



Unexpectedly strong data from the US Service sector also underpin the dollar. According to the data released on Monday, the ISM's non-manufacturing index rose to 52.0% in April from 49.6% in March.



But a report from National Association of Realtors showed that pending home sales in the US fell 1.0% in March, an indication of continuing weakness in the housing market.



The Fed last week had cut its overnight lending rate by 25 basis points to 2 percent and signaled that its next move would depend on developments in financial markets and the economy. The Feds signal boosted the optimism of the traders in the currency market. Since mid-September, the US central bank has slashed the fed funds rate target by 3.25 percentage points to shore up an economy.



Oil prices extended the bullish rally and crossed above $124 a barrel yesterday, for the first time ever, on global supply concerns.



But the weekly update from the US Energy Department’s Energy Information Administration said crude supplies rose 5.7 million barrels to 325.6 million for the week ended May 2.



Crude oil June in NYMEX traded as high as $124.61 and closed at $124.41 ($123.53).



Medium term outlook (Spot Gold)

Weak below $881; supports are $872, $861, $849, $835, $817, $800; resistances $896, $906, $926.



Last day DGCX Gold June traded in the range $867.00 – $886.80 and closed at $883.80 ($870.80).


DGCX Gold June


TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 883; bearish below $ 878

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