Last Updated : January 20, 2010 14:35
Gold: Weaker dollar to help raise gold prices
MAJOR HIGHLIGHTS
Spot Gold prices ended in the green on Tuesday despite strength in the dollar.
International demand for US assets rises on the back of record bond purchases.
MARKET RECAP
Spot Gold prices gained on Tuesday despite a stronger dollar as demand for the yellow metal as a safe-haven increased as markets became wary ahead a host of economic data releases in the later part of the week from the US and China. Gold prices could trade higher in this week as expectations of further weakness in the dollar could support an upside. Officials of the Federal Reserve Bank said yesterday that lending rates in the US may remain low for as long as two years.
The Federal Reserve has kept its target rate at zero percent to 0.25% since December 2008 to revive the economy. Lower interest rates in the US reiterate that the world’s largest economy is still struggling with the worst financial crisis. This concern over economic growth could trigger traditional safe-haven demand for gold. Economic data from the US has come on the negative side and indicates that the world’s largest economy is still fragile.
On the Currency front, the Euro weakened sharply against the dollar on Tuesday after German ZEW index came in much weaker than expected at 47.2 in January versus expectation of 49.5. The Indian Rupee depreciated on Tuesday as strength in the dollar put pressure on the currency. Strength in the dollar coupled with a decline in equities led to depreciation in the currency.
OUTLOOK
On expectations of lower interest rate in the US, the dollar is expected to weaken further. Weakness in the dollar will help gold prices as a weaker dollar will make the yellow metal look attractive for holders of other currencies. In 2009, the rise in gold prices was mainly backed by the weakness in the dollar. Gold prices could continue to witness an uptrend in prices and the bullish phase in the yellow metal could continue.
On intraday basis, Spot Gold prices have immediate support at $1130/$1123 whereas resistance is seen at $1143/$1150. Spot Silver prices shall find support at $18.45/$18.20 whereas resistance is seen at $18.90/$19.10.
MCX Feb Gold has support at 16860/16800 whereas resistance is seen at 16970/17010. MCX Mar Silver shall find support at 28450/28240 whereas resistance is seen at 28780/28895 levels.
Courtesy: Angel Commodities Explore CommodityOnline Mobile Services
MCX NATURAL GAS 27 March 2012
contract was trading at
Rs 173.3 , up Rs. 4.2 . What's your view on it?
