Gold futures recovered yesterday but pared most of its gain at the end of the day. Weakness in dollar and safe heaven appeal of yellow metals supported the prices. But the U.S. plan to inject $250 billion into banks reduced bullion's appeal.

Dollar fell against the euro yesterday as short-term interest rates for dollars eased due to the aggressive steps by global authorities to pump cash into troubled banks to resolve the ongoing credit crisis. The interbank cost of borrowing dollars for three-month had its biggest fall since March on Tuesday, in response to the United States's announcement that it would inject $250 billion into banks.

But Investor demand remained strong as bullion holdings by SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained at a record 770.64 tonnes as of Oct 13.

But gold had witnessed a volatile sessions in last few weeks due to the discontinues buying and selling according to the financial reports, panic selling in global markets and prompted investors to dump assets across the board to meet their liquidity needs and for safe heaven investments . But on weekly basis gold futures recovered from the previous week losses. On Friday gold futures witnessed a volatile trading session despite strong rally in dollar and plunge in oil prices. On Friday itself gold witnessed high volatility around $110.

According to the U.S. Census Bureau, wholesale sales were down 1.0% in August while inventories were up .8%. The U.S. and Labor Department said that jobless claims were down 20,000 last week to 478,000.

International spot gold traded in the range $853.50
- $829.75 a Troy Ounce and last quoted at $835.25.

Weekly Outlook (DG. OCT.)

Expected to trade a wide range of trading in between 934 and 815.On last Friday DGCX gold closed at 851.30 . Resistances are$ 868, $878, $ 894 and $911. Supports are $834, $ 815, $782 and$ 764. Breaking of either a side will make clearer direction

Last day DGCX Gold Dec. traded in the range $858.60– $836and closed at $844.60

TECHNICAL OUTLOOK (Intra-day)

GOLD (Dec) - Bullish above $ 848.50 bearish below $ 843

Courtesy: JRG Wealth Management