comex gold outlook

Gold price recovered yesterday amid weak dollar and short covering from the recent lower levels. Gold price touched a nine months low of $773.90 on last Friday and settled at $ 785.5 due to the strong dollar and fall in crude price. Dollar continued its recovery against the major currencies and recorded a six months high against the Euro on Friday.
At the same time report from World Gold Council, Global demand for gold dropped 19 percent year-on-year to 735.6 tonnes in the second quarter of 2008 as sharply higher prices and increased volatility weakened jewelry buying.

In US, Initial jobless claims for the week ending 9 August decreased by 10k to 450k, well above market expectations for a decrease to 435k vs. the revised 460k in the prior week. The 4-week average is reported at 440.5k (the highest since April 20 2002 week at 445,500) vs. the revised 421.0k (prev. 419.5k). Continuing claims for week ending 2 Aug surged higher to 3.417mn vs. the 3.303mn in previous week (prev. 3.311mn), the highest since Nov. 8 2003 week.

According to the Federal Reserve, industrial production was up 0.2% in July, better than expected, after a 0 .4% gain in June.

According to the report from EIA, gasoline stocks fell 6.4 million barrels, more than a forecast decline of 2.1 million barrels and U.S. crude inventories fell by 400,000 barrels last week, double the forecast decline. Distillate stocks unexpectedly fell by 1.7 million barrels.

At the same time, at the beginning of the month 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.

International spot gold traded in the range $803.65- $789.25 a Troy Ounce and last quoted at $798.35($785.5).

Weekly Outlook (DG. OCT.)

Gold price remain weak below $816.80. But expecting some recovery from lower levels .Resistances are $791, $802, $816.80 and $829.60. Supports are $779, $772, $764, $753 and 743

Last day DGCX Gold Oct traded in the range $806– $792and closed at $802.80

TECHNICAL OUTLOOK (Intra-day)

GOLD (Oct) - Bullish above $ 803.60; bearish below $ 798.40


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