MAJOR HIGHLIGHTS Spot Gold prices are up almost 6% almost (+$53) in 2009, from its December 2008 close at $880 levels.
The SPDR Gold Trust, the largest physically backed exchange traded fund reported that its gold holdings were unchanged at 1,125 tonnes on Wednesday.
MARKET RECAP Gold prices rose slightly during yesterday's trading session but were unable to hold onto the gains of the day, closing near to the open of the day. Prices have wavered in recent days, trading within a tight range as investors gauge the possibility of an economic recovery and square their positions in the safe-haven asset. Investors have been invigorated by a wave of optimism that has swept Wall Street in recent weeks, buying up stocks, yet not losing sight of the economy's problems. Silver also moved in tandem with gold prices.
In currency market, the EURO traded sideways down against the USD with the Euro closing above its 100-Day EMA but below its 200-Day EMA which is acting as crucial and psychological resistance. For the day, resistance is seen at 1.3640/1.3737 whereas support is seen at 1.3451/1.3375. Rupee trading Yesterday, the Rupee traded flat against the USD amidst range bound trading, ending the day at 50.58. Bounce back in domestic equity markets coupled with weak dollar in overseas markets supported rupee. Recent rise in equity markets led to rise in foreign fund inflow in Indian equity, underpinning the local currency. Rupee trading on the exchanges is closed today on account of banking holiday.
OUTLOOK India, normally the world’s top gold importer, may have turned net exporter in the last few months as Indians melt down their jewellery to catch high prices. India imported no gold at all in February for the first time. Bullion prices are in catch twenty-two situation. The stock market’s favorable reception of the US Treasury’s plan to remove toxic assets from banks reduced demand for gold as a safe haven asset. But at the same time, investors are taking buying opportunity once prices of gold are falling near $900/oz levels to hedge against inflation, which is visible through ETF buying. Spot Gold shall continue to find excellent support in the zone of $880-$890 levels which is viewed as value buying zone by investors whereas major resistance zone is seen between $960-$970.
On intraday basis, Spot Gold prices have immediate support at $926.10/$914.50 whereas resistance is seen at $945.60/$957.25. Spot Silver prices shall find support at $13.34/$13.06 whereas resistance is seen at $13.73/$14.01.
MCX April Gold has support at 15070/14950 whereas resistance is seen at 15260/15385 levels whereas MCX May Silver shall find support at 22260/22030 whereas resistance is seen at 22680/22880 levels.
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