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Among the factors that support gold is the Eurozone debt crisis, rock bottom interest rates on financial instability, investment demand in exchange traded funds, and central bank buying. ETP holdings gained 274.9 metr..

29 Dec 2012

CHICAGO/MUMBAI (Commodity Online): Gold is heading for the 12th straight year of gains even as it failed to reach the all time high of $1921.25 per ounce reached in September 2011.

“On daily charts, Comex February futures recovery has been halted at $1677 levels and could be heading lower next week as trading volumes have also fallen sharply from 137353 to 75354 contracts in the span of a week,” Sreekumar Raghavan, Chief Commodity Strategist at Commodity Online said. Moreover, RSI is bearish at 35.48 and MACD is also in negative territory, he added. 

Many analysts point out that gold is now behaving like a risk asset rather than a safe haven asset and hence the recent volatility,fall in prices.

Among the factors that support gold is the Eurozone debt crisis, rock bottom interest rates on financial instability, investment demand in exchange traded funds, and central bank buying. ETP holdings gained 274.9 metric tons this year and reached a record 2,632.5 tons on Dec. 20, equal to almost a year of mine production, Bloomberg reported.

Global gold demand in 2013 should be led by further strength in Chinese demand and a recovery in India, helping the precious metal continue its bull run into its 13th year, the industry-backed World Gold Council has said.

At India's Multi Commodity Exchange, gold for February on a weekly basis has declined to Rs 30913 per 10 gm to Rs 30663 on Friday with volumes falling while open interest is quite high denoting speculative demand for the commodity. "Gold seems to be consolidating at 30500 to 31000 levels exhibiting sideways movement and perhaps gathering strength to move up," Sreekumar Raghavan said.

With Rupee emerging stronger, jewellers were buying up stocks on price decline but retail and investment demand appears dull, traders said. Holiday sentiments ahead of New Year are also affecting market dynamics, they added. 

Gold may trade range bound at Rs 29,000 to Rs 32,000 per 10 grams in the near term due to better economic growth expectations and expected rate cuts from banks.


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