Commodity Online
Indian imports of gold in the month of April have increased to approx. 40 tonnes as against no imports in Feb and March. The increase in imports has begun due to stabilization of gold prices in India at around Rs.14, 000-14,700/- in the month of April and the beginning of the wedding season.

Major equity market indices worldwide have seen a strong recovery in the month of April thereby, increasing investor risk appetite thereby, reducing the appeal of bullion as a safe haven. From a low in the Dow Jones of 6470 that the market has seen on 6-Mar-09 the Market has closed at 8136.9 on 30-Apr-09.

The recoveries in US equity markets have come on the back of a better Economic data and lower apprehension of a long recession in the US.

The fall in Gold would have been much sharper had it not been for a weaker dollar.

LIBOR: One has also seen the 3-month benchmark LIBOR index falling from 1.19% to 1.00%. The last time one had seen such low rates were 1.0856% on 15-Jan-09. Gold had risen sharply on issues of lack of liquidity & impending uncertainty in financial markets. An easing LIBOR is indicative that liquidity issues are easing on the back of quantitative easing by various Central Banks worldwide and a low interest rate regime by major Central Banks.

Gold appears to be in a consolidation phase with the underlying trend appearing to be bearish. Gold is expected to trade in a range of 865- 918$ per troy ounce. 865$ was also the low made on 6-Apr & 17- Apr 2009. The market would be looking at testing 918$ per ounce which was the high on 27-Apr-09.

A close above 926 $ per ounce would see the market testing 950-955$ which would be the 76.4% retracement of the Gold price move from 901.5$ per ounce on 15-Jan-2009 to 1004.9$ per ounce on 20-Feb-2009. The trend in Gold would turn bearish if it closes below 856$ per ounce the 200DMA which has not breached since 20-Jan-09.

Silver is expected to trade in a range of 12-13$. Silver should take support at 12$ failing which the market should take support at 11.72$ seen last on 20/04/2009.

Silver appears to be consolidating at these levels with the underlying trend appearing to be bearish. 12$ per ounce should prove to be a major support for Silver as it is the trend line support since 28-Oct-2009.

Gold’s bearish trend is also supported by a reduction in the OI from a high of 387,177 lots on 24/3/2009 to around 343,037 as on 28/4/2009.

A similar reduction has also been reflected in the speculative longs from 178,635 lots on 24/03/2009 to 166,821 lots as on 28/4/2009. On the other hand, speculative shorts have built up from 26,708 lots to 37,721 lots in a similar time frame thus, indicating the speculative long positions have been exiting the market.