MCX Gold market under long liquidation; Support seen at 29886
Commodity Online | November 08 2016
UPDATED 10:09:30 IST

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Gold settled down by -1.57% at 30078 as the U.S. dollar and stocks rallied after federal investigators cleared Democratic presidential candidate Hillary Clinton of criminal charges related to her use of a private email server, just two days before the election. The Federal Bureau of Investigation (FBI) said it stood by its earlier finding that no criminal charges were warranted against Clinton for using a private email server for government work.

Uncertainty over the outcome of the U.S. election after the FBI probe had boosted the safe-haven appeal of gold, sending prices 2 percent higher last week. Meanwhile, bullion was also being pressured by increasing odds of an interest rate hike in December by the Federal Reserve. Strong U.S. jobs data in October showed continued progress towards the Federal Reserve's goals, two Fed policymakers said on Friday, with both supporting an interest rate hike at the central bank's meeting in December.

Gold prices in India swung to a discount this week as a rally in prices dampened retail demand and prompted jewellers to reduce purchases, while demand in leading consumer China went up on safe-haven buying on worries over the U.S. presidential election. Dealers in India, the world's No.2 consumer of the metal, were offering a discount of up to $3 an ounce over official domestic prices this week.

Last week they were charging a premium of $3, the highest in 2016, on robust demand due to festivals like Diwali and Dhanteras. Technically market is under long liquidation as market has witnessed drop in open interest by -2.49% to settled at 6891 while prices down -479 rupee, now Gold is getting support at 29886 and below same could see a test of 29693 level, and resistance is now likely to be seen at 30391, a move above could see prices testing 30703.

Trading Ideas:
--Gold trading range for the day is 29693-30703.
--Gold prices fell as U.S. dollar and stocks rallied after FBI cleared Democratic presidential candidate Hillary Clinton of criminal charges.
--Bullion was also being pressured by increasing odds of an interest rate hike in December by the Federal Reserve.
--China's gold reserves rose to 59.24 million fine troy ounces at the end of October, up from 59.11 million a month earlier, the central bank said.

Courtesy: Kedia Commodities