comex gold outlook

Gold ended lower yesterday as the fall in crude oil price and broad recovery in dollar. Crude futures ended lower on Tuesday, with oil operations in the Gulf of Mexico starting to return to normal as Tropical Storm Edouard moved inland after striking the Texas coast. Sign of increased OPEC output and the threat to demand from economic slowdown also affected the crude movement.

On Tuesday The Federal Reserve held U.S. interest rates steady at 2 percent, expressing concerns about both economic growth and inflation and indicating it is in no rush to push borrowing costs higher.

From Friday onwards gold has been under pressure as dollar strengthened on the back of better-than-expected U.S. nonfarm payrolls data and manufacturing data.

According to the data, U.S. employers eliminated 51,000 non-farm jobs in July against market expectations for a payrolls decline of 75,000. But U.S. unemployment rate changed to 5.7 percent from 5.5 percent, its highest level in four years.

International spot gold traded in the range $894.9- $872.8 a Troy Ounce and last quoted at $873.25 ($893.65).

But data’s from different sectors are giving a mixed trend in the US economy

Standard & Poor's Case-Shiller home price index revealed that home prices in 20 major US cities have fallen a record 15.8% in the past year, and fell 1% in May compared with April.

Meanwhile, the US Senate cleared a bill designed to prop up the struggling US housing market and rescue the struggling giant mortgage-buyers Fannie Mae and Freddie Mac. The bill includes billions of dollars in loan guarantees, a tax break for first-time homebuyers and many other provisions.

The Federal Reserve's Beige Book report of economic conditions last week showed price pressures were intensifying even as growth slowed over the past month.

Weekly Outlook (Spot Gold)

Expecting weakness below $899.30, Otherwise expecting recovery. Supports are $ 893, $884, $873.Resistances $911, $920.60, $936.60

Last day DGCX Gold Oct traded in the range $896.7– $878.1 and closed at $878.5

TECHNICAL OUTLOOK (Intra-day)

GOLD (Oct) - Bullish above $ 885.5; bearish below $ 885

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