Spot gold settled with a minute change from the prior as most of the global markets were into the festive holidays. Thin volumes coupled with absence of economic data fell to provide any trigger to the prices.
Among Asian equities except India most of the major indices were closed. Indian rupee depreciated once again and Euro edged slightly lower against the dollar at settlement.
Holdings of the SPDR trust, world’s largest gold backed exchange traded fund, remained unchanged at 1254.57 tons as on Dec.23 after it reduced by 13 tons in a single day.
Outlook
Today morning gold future at the Globex platform is seen trading down by $7.40, at $1598.60. Asian equities fell for the first time in three days after the Bank of Japan hinted risk to the economy has increased.
Market might also remain weak before Italy sells bills and bonds worth 9 billion Euros of 179-day bills and 2.5 billion Euros of zero coupon bonds tomorrow amid casting doubt over rise in bond yields as the ten year Italian bond yield advanced six basis points to 6.98%, approaching the threshold level of 7%.
So, Euro might remain under stress as markets are waiting to see the demand for the Italian debt.
The dollar index held losses from the last week before reports from the US might show the home prices decline.
However, survey shows there is chance for the US consumer confidence to rise. Manufacturing index may also show some progress. So, dollar might recover in the evening.
Overall, we expect gold to remain weak for the day ahead of the key data releases from the US. Italian bond auction should be watched keenly and accordingly should take the call for the metal.
However, we expect yield to remain high on the back of which a weaker Euro will pressurize the metal. Hence, we recommend remaining short for the metal for the day.
MCX Gold Feb'11 support:27739 27758 resistance:27793 27806 Sell at 27740-27750 TP 27600/27450 SL 27920
Courtesy: Karvy Commtrade Ltd.
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