MAJOR HIGHLIGHTS
Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, stood unchanged for a fourth day at 1,028.98 metric tons yesterday.
Total gold holdings of eight exchange-traded funds tracked by UBS fell to 47.63 million ounces Feb. 23 from 47.64 million Feb. 20, the first decline this month.
MARKET RECAP Bullion prices fell sharply during yesterday’s trading session after a marvelous run last week. Spot Gold prices fell the most in past 6 weeks. Profit booking at higher levels with gold unable to hold above the $1000 mark consistently led investors to lighten their long positions. Also, US Stocks advanced slightly during yesterday’s trading session after Federal Reserve Chairman Ben Bernanke’s statement that banks need not be nationalized. Also, total gold holdings of eight exchange-traded funds tracked by UBS fell to 47.63 million ounces Feb. 23 from 47.64 million Feb. 20, the first decline this month.
In currency market, Euro gained against USD during yesterday’s trading session. It has been weakening consistently against USD over the past 2 months with last week's low of 1.2512 acting as short-term support. Further below, Euro continues to be strongly supported at 1.2328, its weekly low on 28th Oct. 08. For the day, resistance is seen at 1.2892/1.3093 whereas support is at 1.2590/1.2489. Yesterday, Rupee lost against USD, ending the day at 49.84 (+0.18). It has breached its key resistance of 49.35 which it had been holding for the last 10 weeks, supported strongly at 48.40 which is last week's low. For the day, resistance is seen at 50.07/50.25 whereas support is seen at 49.55/49.20.
OUTLOOK
The bullion pack earlier found it extremely hard to consistently trade above the $990 mark as profit booking led to prices falling sharply. Silver also fell in line with gold prices. The surge in physical and quasi-physical gold investment over the past six months has been very much a U.S. and European phenomenon, whereas Asian & Middle Eastern holders of gold are selling and are keeping the scrap market very well supplied. Gold generally trades in positive correlation with the Euro but this is not the case at present. Bullion, which would usually be pressured by a dollar recovery, has recently shrugged off moves in the currency. Further, the overall changing global economic scenario shall continue to play a key role in determining bullion prices as investors evaluate various asset classes to channel their funds. Still gold remains the best bet under current market scenario.
On intraday basis, Spot Gold prices have immediate support at $952/$942 whereas resistance is seen at $962/$972. Spot Silver prices shall find support at $13.50/$13.20 whereas resistance is seen at $14.00/$14.35.
MCX April Gold has support at 15250/15040 whereas resistance is seen at 15425/15580 levels whereas MCX March Silver shall find support at 22100/21650 whereas resistance is seen at 22650/22890 levels.
Courtesy: Angel Commodities
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