MUMBAI (Commodity Online): MCX Apr Gold contract opened flat at 16509 vs. previous close of 16503 and made an intraday low at 16473. Presently at 5.50 pm Gold at MCX traded at 16575 up by 72 rupees.
14 days RSI for MCX gold Apr contract is at 52.19 level and it shows gold prices are steadily rising.
“Technically, Gold looks steady and range for MCX Gold is from 16250 to 16750,” said Shyamal Mehta, Sr. Commodity Analyst with Commodity Online. Presently gold prices are trading well below 5, 7 and 14 day weighted moving averages which signals uptrend.
Support for the Gold is seen at 16400 and below could see a test of 16300. Resistance is now likely to be seen at 16650, a move above could see prices testing 16800. Gold prices are likely to move up in the evening session as dollar is likely to become weak against major currencies.
Gold nudged above the $1,100 an ounce mark in London dealings on Monday, continuing recovery off recent three month lows near $1,044 an ounce, and supported by rallying equity markets and as the EUR/USD pair stabilized above the 1.36 mark.
At 10.32GMT, spot gold was quoted $1,100.50 an ounce, up from $1,093.20 an ounce late in NY on Friday. At the same time, the benchmark COMEX gold futures contract for April delivery – GCJ10 – was trading $11.0 higher at $1,101.00 an ounce. Earlier in the overnight electronic session, the contract had risen as high as $1,101.30 an ounce, its strongest since February 4th. The EUR/USD pair traded at 1.3625, still down from 1.3633 late in NY on Friday.
“Last week we saw a decoupling between the EUR/USD pair and gold”, said Matthias Detremmerie, referring to the Euro weakening on the back of inconclusiveness on rescue measures for Greece’s debt crisis, while gold profited from positive risk appetite, tracking rallying markets. He added that “gold currently seems to take into account only the bounces in the Euro and seems less vulnerable to bouts of dollar strength that is mainly inspired on traders assessments of the Greece’s situation”.
Gold furthermore zoomed in on key technical resistance, with a bearish downtrend line - off the December 2009 record high - capping the topside between $1,102-$1,105 an ounce. “Once above here, there might be some significant buy-through, carrying prices higher. Targets include $1,126.40 and $1,166.70 for the COMEX April gold contract”, Detremmerie believed, adding that “the last commitment of traders analysis shows a healthier framework for sustainable upside, given the recent drop of over-extended speculative longs”.
On the contrary, investment flows remained weak, with the fifteen by Goldessential.com monitored gold-backed exchange-traded funds jointly losing 1.32 tons on Friday. Holdings in the monitored silver and palladium trusts rose, while holdings in the platinum ETF’s remained unchanged.
