MUMBAI (Commodity Online): MCX Apr Gold contract opened up at 16292 vs. previous close of 16277 and made an intraday low at 16285. Presently at 7.38 pm Gold at MCX traded at 16360 up by 82 rupees.
14 days RSI for MCX gold Apr contract is at 45.48 level and it shows gold prices are steadily rising.
“Technically, Gold looks steady and range for MCX Gold is from 16100 to 16400,” 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 16300 and below could see a test of 16200. Resistance is now likely to be seen at 16480, a move above could see prices testing 16580. Gold prices are likely to fall in the evening session as dollar is likely to become strong against major currencies.
COMEX gold futures were edging higher in overnight electronic trading on Thursday, as the EUR/USD pair remained well supported, having touched just above 1.3800 earlier in the late Asian session on the back of speculation on a solution for Greece’s debt issues.
Remarks by EU president Van Rompuy around London midday, saying that “Greece won’t be left alone”, helped to counter earlier consolidation.
“It’s fairly calm”, said Carl Johansson, sr precious metals analyst with Goldessential.com. “Despite the uncertainty over Greece over the last few days – and the weak technical outlook for the Euro -, there has been decent support for for the single currency over the last few sessions. This surely helped to curb further losses in gold, which had equally been looking vulnerable after last week’s momentum-based correction”.
“Nevertheless, gold is still sideways, with speculators very wary on taking this recovery too far without having full backing by a significantly weaker dollar and better risk appetite”.
Johansson indicated the boundaries for the sideways band for gold were situated near $1,085 (top) and $1,060 an ounce (bottom), with a breach of either one expected to lead to fresh stop-loss driven momentum.
At 12.57GMT on Thursday, ahead of NY opening, spot gold was quoted $1,078.80, up from $1,072.80 an ounce late in NY on Wednesday. At the same time, the benchmark COMEX gold futures contract for April delivery – GCJ10 – was trading $3.2 higher at $1,079.50 an ounce. Earlier in the overnight electronic session, the contract had touched as high as $1,082.40 an ounce.
The preceding London had mostly characterized by profit taking amidst thin market conditions. A statement by European Union president Van Rompuy at the EU economic summit, indicating that “there is a deal to help Greece” was seen supportive to the Euro, helping it off an intraday low, whilst also sparking recovery in gold, which had consolidated towards $1,075 an ounce. Nevertheless, details on a possible deal remains scarce, with markets still to a large extent in a “wait and see” mode.
Matthias Detremmerie, founder of Goldessential added that “investor demand for gold remains weak, with fresh inflows this year so far having been very scarce. 2010 so far faces a net outflow of just over 22 tonnes in gold-backed ETF’s. Unless gold can break above $1,085 an ounce and generate some follow through buying, chances are very real that we haven’t seen the bottom of this correction yet”.
