comex gold intraday

Gold prices rose sharply yesterday, along with a rally in oil prices to record high levels, as the dollar plunged against the major currencies and registering a new historic low against the euro.



International spot gold traded as high as $948.90 and last quoted at $944.70 ($928.00).



Data from the US Commerce Department showed that the housing starts dropped 11.9%, to a seasonally adjusted annual rate of 947,000 in March.



But on Tuesday, the US Labor Department reported that the wholesale prices had risen 1.1% in March, against the expectations for a 0.4 % increase; while the core producer price index, which excludes volatile food and energy, rose 0.2%. This had temporarily reduced the expectations of a further immediate cut in interest rates by the Fed.



In data from the US housing sector, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for April was unchanged at 20 as expected, but remained near the all-time low level.



Data from the US Commerce Department on Monday showed retail sales rose 0.2% in March, compared with economists' consensus expectation for a 0.1% decline.



Sentiments in the dollar remain dampened on sustained fears regarding the US Economy, after data showed US consumer confidence 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.



The initial jobless claims in the US fell 53,000 to 357,000 in the week ended April 5, as reported by the Labor Department last week. But the four-week average of initial claims rose by 2,500 to 378,250.



Also, continuing jobless claims rose 3,000 to 2.94 million, the highest since July 2004, for the week ending March 29. The four-week moving average of continuing jobless claims increased 36,500 to 2.9 million.



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 left the interest rates unchanged, while the Bank of England cut its benchmark interest rate by 25 basis points to 5 percent.



The International Monetary Fund (IMF) proposal to sell 403.3 metric tons of gold from its reserves, which is currently valued at more than $13 billion, weighed on the traders’ sentiments in the bullion.

The minutes from the Federal Open Market Committee meeting held in March gave 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.

Crude oil May in NYMEX recorded a fresh all-time high of $115.14 a barrel and settled at $114.93 ($113.79).

Oil prices were propelled by supply concerns after a reported decline in Russia’s oil output for the first time in the decade. This was in addition to earlier reports of supply disruptions from Mexico, where bad weather forced the closure of four export terminals, and Nigeria.

The weekly inventory update from US Energy Department showed a surprise decline in the nation’s crude inventories. As per the report, US crude inventories fell by 2.3 million barrels to 313.7 million barrels during the week ended April 11.

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 $928.40 – $952.40 and closed at $947.80 ($931.00).


DGCX Gold June

TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 946; bearish below $ 942

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