mcx gold outlook

The U.S. Dollar Index, which measures the greenback against the currencies of six trading partners, advanced to a 30-month high (88.15) yesterday.
The German economy, Europe's largest, slid into its worst recession in at least 12 years in the third quarter as the global financial crisis curbed exports and spending, government data showed yesterday.

U.S. stocks climbed, with Dow Jones Industrial Average rising 552.59, or 6.7 percent, to 8,835.25, after tumbling as much as 317.24 points earlier during yesterday’s trading session.

MARKET RECAP

The bullion pack witnessed an extremely volatile trading session yesterday with Spot Gold briefly breaching the $700 mark to recover sharply after market hours on the back of recovery in the Euro. Hedge funds liquidation has also hit the bullion pack hard as rush for cash led to sell-off across all asset classes. Crude futures breached the $55 mark, pulling prices to 22-month lows over declining energy demand concerns, also putting pressure on gold prices.

In currency market, the Euro rose sharply during yesterday’s trading session to close above its 10-Day Moving Average. The overall trend still remains sideways-down. For the day, Euro shall meet with resistance at 1.2928/1.3138 whereas support is seen at 1.2672/1.2492. The short-term top (87.88) for the Dollar Index was breached during yesterday’s trading session but later in the trading session, the DI fell sharply to close lower at 86.50.

Silver prices also fell during yesterday’s trading session briefly breaching the $9 mark but managed to recover all its losses to close in positive territory, following gold prices.

OUTLOOK

Spot gold prices have continued to trade in the range of $680 - $780 levels for the past 17 trading sessions. The presence of mixed trends in the bullion pack is indicative of indecisiveness in the markets. The Bullion prices are primarily being affected by currency movements and to some extent by crude prices. The Dollar Index still maintains its uptrend though it appears to be losing steam. Unless we see a reversal in trend in the $, bullion prices will continue to remain under pressure. Also, bullion pack is being impacted by the global economic weakness which isn’t appearing to help the bullion pack much. There's still is a push to hold cash amongst the investors community.

On intraday basis, Spot Gold prices have immediate support at $720/$700 whereas resistance is seen at $740/$755. Spot Silver prices shall find support at $8.95/$8.50 whereas resistance is seen at $9.60/$10.00.

MCX December Gold has support at 11550/11380 whereas resistance is seen at 11770/11880 levels whereas MCX December Silver shall find support at 16000/15970 whereas resistance is seen at 16520/16725 levels.


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