comex gold intraday

Gold Outlook
29 May 2008 10:52:19



Gold drifted lower yesterday, as the dollar held on to its previous day gains.



International spot gold traded in the range $909.40 - $888.90 and last quoted at $900.10 ($904.80).



The dollar found support in better-than-expected survey on US durable goods orders. Data from the Commerce Department showed new orders for US-made durable goods dropped less than expected 0.5 % in April, against the expectation for a 2.8% drop.



The recent data from the US have given mixed hints regarding the economy.



According to the release by US Conference Board on Tuesday, the consumer confidence index fell to 57.2 in May from a revised reading of 62.8 in April.



However the sales of new homes recovered during April for the first time in six months, rising 3.3% in April to a seasonally adjusted annual rate of 526,000, the Commerce Department reported.



Even so, the housing market worries remained. Standard & Poor's reported that the decline in home prices for 20 US metropolitan areas accelerated in March, dropping 14.4% from the past year.



Earlier, the National Association of Realtors had reported a 1 % drop in the resale of houses and condos to a seasonally adjusted annualized rate of 4.89 million in April, from 4.94 million in March.



On last week, the Office of Federal Housing Enterprise Oversight reported that US home prices fell a seasonally adjusted 1.7% in the first three months of 2008, which happens to be the largest quarterly price decline on record.



But data from the job market was slightly encouraging. According to the latest release by US Labor Department, first-time claims for unemployment benefits fell by 9,000 to a seasonally adjusted 365,000 in the week ended May 17th. However, the four-week average of initial claims rose by 5,000, reaching 372,250.



The number of continuing jobless claims was unchanged for the week ended May 10, at 3.07 million. The four-week average of those claims rose by 31,750, to 3.05 million.



The minutes from the Federal Open Market Committee's April 29-30 meeting had invigorated worries about the economy. The minutes released last week revealed that the Fed sharply increased its inflation outlook for the current year and downwardly revised the forecast for economic growth for 2008.



According to the latest forecast, headline inflation as measured by the personal consumption expenditure price index would rise to a range of 3.1% to 3.4% this year, significantly higher from its previous forecast of 2.1% to 2.4% in January.



The real GDP growth is revised to grow at 0.3% to 1.2% this year, down from the previous forecast of a 1.3% to 2.0% rate.





Oil prices bounced back to $131 levels, after falling below $126 due to profit booking by the traders from the recent rally. The market is awaiting the US Energy Department’s weekly inventory report, which will be released later today, for the latest updates on crude inventories.



Crude oil July in NYMEX settled at $130.82 ($128.25), after trading in the range $131.58 - $125.96.



Potential supply threats due to geo-political tensions, expected demand from China and OPEC’s unwillingness to increase output despite high prices underpin oil prices.



Another attack on Nigerian oil facilities refocused concerns on immediate supplies. Production was partially disturbed after militants attacked a major oil pipeline owned by Royal Dutch Shell in the Niger Delta on Monday.



Last day DGCX Gold Aug traded in the range $914.10 – $893.80 and closed at $904.00 ($910.20).



Weekly Technical Outlook (Spot Gold)

Above $930 likely to touch $936.50, $945, $955; Supports are $921, $914 and $903. Expecting some correction below $914.

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 906.00; bearish below $ 901.50

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