Gold futures surged and settled up by +0.75% at 27589 on wednesday yesterday indian market where closed and Gold jumped to the highest level in more than six-weeks, adding to strong gains made in wake of the Fed Reserve’s pledge to keep rates lower for longer, while some safe-haven bids re-emerged after prices rose above a key technical level.
The dollar came under broad selling pressure after the Fed said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a QE3, sparking a rally in gold prices.
The central bank will provide an explicit discussion of FOMC member expectations for the balance sheet when the minutes to this meeting are released on February 15.
Now technically market is trading in the range as RSI for 18days is currently indicating 45.88, where as 50DMA is at 27978 and Gold is trading below the same and getting support at 27288 and below could see a test of 26986 level, And resistance is now likely to be seen at 27773, a move above could see prices testing 27956.
Trading Ideas:
Gold trading range is 26986-27956.
Gold surged to the highest level in wake of the Federal Reserve’s pledge to keep rates lower for longer.
Greek media reported earlier that the country’s creditors were prepared to accept lower interest rates on new bonds.
SPDR gold trust holdings gained by 10.58 tonnes to 1261.11 tonnes.
Courtesy: Kedia Commodities
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