bullion

Spot Gold prices rallied Thursday to settle above $860 an ounce after a weak U.S. dollar coupled with a record-setting push crude oil to $100 oil spurred demand for the precious metal. Other commodities also climbed, further boosted by an influx of money into the market at the start of the New Year.

Gold for February delivery on MCX raised Rs, 11003 per 10G and Silver March touched the high level of Rs.20144 per kg New York Mercantile Exchange. Prices hit a trading high of $871.20, surpassing gold's recent high of $850, but still falling short of the all-time high of $875 an ounce set in 1980.

The surge in oil prices helped boost the price of gold as investors shifted resources to the precious metal, often seen as a safe haven against inflation and political uncertainty.

The U.S. currency fell against the euro Wednesday after a key measure of the U.S. economy's manufacturing strength showed the sector contracted last month after 10 straight months of growth.

The Institute for Supply Management, a private research group, said its manufacturing index registered 47.7 last month, down nearly 3 percentage points from 50.8 in November. A reading above 50 indicates growth; below that indicates contraction. The euro rose to $1.4728 against the dollar in late New York trading. Coupled with a weak dollar, new-year index buying further boosted oil and agricultural futures.

The Commerce Department reported new factory orders rose 1.5 pct in November, which is the largest monthly increase since July. Factory orders excluding transportation equipment were up 1.4 pct, the largest gain since September and also above expectations for the month.

MCX Gold Feb (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Buy at 10950-70 for the target of 1160 and 11140 with stop loss at 10915


MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Silver March: Buy at 20000-20010 for the target of 20250 and 20400 with stop loss at 19860