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VIEW ON PRECIOUS METALS [GOLD]


 

 

 

11/05/201                                                                                     Gold

 

Comex Gold futures touched this year low of $1572/oz today(11/05/12) on account of political turmoil in Europe and mounting optimism about the U.S. economy drove investors to favor the dollar.

Currently COMEX gold June futures trading around $1580.80/oz and in MCX same month contract is trading at Rs 28,360.

This year gold rallied to high of $ 1792 in Feb, then gold has been falling and the precious metal erased almost all of this year’s gains.

China’s strong demand for bullion may help support gold prices at lower levels and a recovery in Indian gold demand should be an important factor in support of gold prices.

If US economy shows continued growth in coming days, investors may not opt to invest in gold.

In recent days US economy is showing positive signs of recovery and if this continues, then gold may lose its safe haven status to dollar.

 

Technical outlook:

 

Gold breached itspsychological support level of $1600 this week and continuing its bearish trend.

Gold Prices in COMEX under Symmetrical triangle and Triple bottom formation.

The closing below four year long-term trend line with such a big bearish candle in the weekly chart marks the bearish trend in gold prices. The possibility ofthe prices falling below $ 1500 also can’t be ruled out.

The strong support seen at $ 1525 to $ 1540 levels (61.8% Fibonacci retracement level) with $1625 & $ 1680 immediate resistances.

The short-term trend is to the downside targeting $1525, as long as gold treads below $1652.

Expected trading Range: $ 1525 to $ 1625.

Comex Gold Weekly chart 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31/1/2012

GOLD

Gold on the COMEX division of the New York Mercantile Exchange recouped its losses in New Year and now currently trading at $ 1740level per Ounce.

 

Gold has managed to overcome several headwinds, including profit-taking from Chinese participants and fresh negative sentiment in the Eurozone. Gold prices recovered by 14% reaching $ 1740 after touching its low of 1523.90 on 29th Dec-11 with Worries over Greece's inability to reach an agreement on restructuring its governmental debt with the private sector.

Gold rose to 4.5% in five sessions starting from 25th Jan-12 on the US Federal Reserve statement to keep short-term interest rates close to zero "at least through late 2014" – longer than previously indicatedsuggests the economy will not fully recover from the recession that started in 2008 for at least another two years. Bernanke said that the Fed could take further action by another round of Quantitative easing "if conditions warrant".    

The Gold prices in MCX crossed Rs.28000 per 10 gm on currency weakness tracking global prices. The weak rupee contributed to India's importing of only 125 tonnes of the yellow metal in the fourth quarter of 2011, less than half of the previously anticipated 281 tonnes by the World Gold Council. The demand for the yellow metal in calendar 2012 have been responsible for one third of the 1.3% rise in India's current account deficit. The government reacted to this with its latest tariff slap on bullion.

As per COT report, the Comex net speculative length climbed 29 tonnes to 498.4 tonnes last week. The change in the net position is due to the addition of 26 tonnes in speculative longs and a three-tonne decrease in shorts.

Technical Analysis:

Gold in COMEX continuously moving higher with clear uptrend After sharp fall from $ 1800 to $ 1523.90 per OZ  in November & December last year, It recovered 14% gain in a single month of this year.

The uptrend expected to continue till strong resistance of $ 1800 with the support at $ 1680.

 Expected Short term range: $ 1680 - $ 1800 per OZ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31/1/2012

GOLD

Gold on the COMEX division of the New York Mercantile Exchange recouped its losses in New Year and now currently trading at $ 1740level per Ounce.

 

Gold has managed to overcome several headwinds, including profit-taking from Chinese participants and fresh negative sentiment in the Eurozone. Gold prices recovered by 14% reaching $ 1740 after touching its low of 1523.90 on 29th Dec-11 with Worries over Greece's inability to reach an agreement on restructuring its governmental debt with the private sector.

Gold rose to 4.5% in five sessions starting from 25th Jan-12 on the US Federal Reserve statement to keep short-term interest rates close to zero "at least through late 2014" – longer than previously indicatedsuggests the economy will not fully recover from the recession that started in 2008 for at least another two years. Bernanke said that the Fed could take further action by another round of Quantitative easing "if conditions warrant".    

 

The Gold prices in MCX crossed Rs.28000 per 10 gm on currency weakness tracking global prices. The weak rupee contributed to India's importing of only 125 tonnes of the yellow metal in the fourth quarter of 2011, less than half of the previously anticipated 281 tonnes by the World Gold Council. The demand for the yellow metal in calendar 2012 have been responsible for one third of the 1.3% rise in India's current account deficit. The government reacted to this with its latest tariff slap on bullion.

As per COT report, the Comex net speculative length climbed 29 tonnes to 498.4 tonnes last week. The change in the net position is due to the addition of 26 tonnes in speculative longs and a three-tonne decrease in shorts.

Technical Analysis:

Gold in COMEX continuously moving higher with clear uptrend After sharp fall from $ 1800 to $ 1523.90 per OZ  in November & December last year, It recovered 14% gain in a single month of this year.

The uptrend expected to continue till strong resistance of $ 1800 with the support at $ 1680.

 Expected Short term range: $ 1680 - $ 1800 per OZ

 

28/11/2011

GOLD

 

Comex gold futures for Dec’11 contract traded last week (Nov 21-25) in the range of $1727 - $1667 and ended lower by $ 40, as a strong dollar and disappointing Italian, German debt auction.

Currently the same contract trading at $1715 today in COMEX and Rs 28720 in MCX

The recent correction in gold prices mainly because of dollar rally and weak global equity markets.

The dollar climbed to the highest in seven weeks against the euro in last week. The strengthening dollar is eroding demand for gold as an alternative investment.

Declines in equity markets and commodities also forced investors to sell their bullion holdings to cover margins and losses.

However, recent demand from central banks and investments in Exchange-traded funds giving good support to the gold prices. 

 

TECHNICAL OUTLOOK:

In daily chart Gold prices are still at end of symmetrical triangle pattern representing consolidation.

The breakout on either side of triangle will give clear direction of the Gold.

Support will be seen in the $1,667-1,670 zone and an unexpected fall below this level leads to decline towards recent lows of $1,600 or even lower.

Upside, Gold is facing strong resistance at $1,795-1,800 level and move above this level could change the bigger picture view to bullish again.

 For now a consolidation in the $1,680-1,727 range and Rise above $1,727 level could take prices higher towards $1,745 levels.

Gold’s long term up trend is still in progress and we stay bullish as long as $ 1640 channel support holds.

Short-term range: $1665/oz  TO  $1745/oz 

Daily chart of COMEX GOLD DEC'11 Futures:

 

17/11/2011

GOLD

 

Gold for DEC delivery rallied to $1800/oz (touched on 8th Nov 2011)   level in COMEX an account of unsolved euro zone debt crisis and uncertain global financial markets.

Currently COMEX gold for DEC delivery trading around $1760/oz and in MCX same month contract is trading at Rs 28,875).Gold, which had risen nearly 15% since hitting a two-month low in late September ($1532/oz), has benefited from investor demand in the current market turmoil.

Highlights of the World Gold Council’s report on Gold Demand Trends which is released on 17th NOV,

 

Gold demand in the third quarter of 2011 reached 1,053.9 tonnes, an increase of 6% compared to the same period last year. This equates to US$57.7bn, an all-time high in value terms.

Investment demand in Europe reached a record quarterly value of €4.6bn, equating to 118.1 tonnes - a year-on-year increase of 135%.

Chinese jewellery demand was 13% higher year-on-year at 131.0 tonnes,

Jewellery demand in India was sluggish during the seasonally slow months of July and August, compounded by high inflation and greater volatility in the local gold priceOverall, Indian jewellery demand in Q3 saw a 26% decline in tonnage.

Global gold investment demand reached 468.1 tonnes in the third quarter of 2011, up 33% from 352.1 tonnes in the corresponding quarter in 2010.

Demand for gold bars and coins increased 29% to reach 390.5 tonnes, up from 303.0 tonnes in Q3 2010

Central bank net purchases amounted to 148.4 tonnes.

Gold supply was 1,034.4 tonnes in the third quarter of 2011, 2% higher than year-earlier levels of 1,013.0 tonnes. Mine production increased by 5% to 746.2 tonnes from 710.9 tonnes during the third quarter of 2010.

 

The above report clearly indicates that gold demand is continuously increasing in terms of investment and jewellery, despite high prices and volatility.

Gold can sustain these levels as long as euro zone debt crisis persists and demand from central banks continues .

Technicals:

In daily chart Gold prices are at end of symmetrical triangle pattern representing very clear consolidation.

No particular direction spotted from the charts and the breakout on either side of triangle dependent upon the economic fundamentals from Euro Zone.

Close below $ 1730 is bearish signal for gold and may pull the prices further down to  $ 1640 levels within no time.

In the bigger picture, gold's long term up trend is still in progress and we stay bullish as long as $ 1640 channel support holds and consolidation expected at these levels. If it breaches $1640 level, alerts a reversal signal as gold would probably meet medium term channel support.

 

Short-term rang:  $1640/oz  TO  $1840/oz

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