Gold futures continued its corrective move for the first half of the week since recovery in US economy and alleviation of the Euro Zone crises had reduced the safe haven appeal of gold. However the market witnessed recovery moves in the later half of the weak and international gold price closed at 1667.37 levels at the end of the week. China had shown recovery in the manufacture sectors with the increase in industrial output. However credit constraints to control inflation had limited its mood in manufacture sector reforms. Meanwhile the Eurozone minister had agreed to increase the financial support to 700 billion Euros to revamp its economy. The bearish sentiments in dollar can in turn support the recovery mood in gold. Dollar index closed at 78.94 at the end of the week. And euro currency strengthened against dollar and reached the consolidation phase after the up move from 1.3002 to 1.3385 levels. Investors believe that demand from the Asian region especially from India and China can add some relief to gold prices. But the rupee weakness against dollar and impose of import duty on gold to contain inflationary pressure is not delivering a prospective picture to such expectation. Relying to its glorious immediate past, bargain hunting on prices to propel the investment demand is the best sought action to support the recovery move.
International spot gold
The possibility of the pullback back move is still alive in the counter as long as 1660 act as the support to its recovery moves. Giving impetus to the present formation in the daily chart, the most probable move is expected in the upside targeting toward 1675/1696 levels. However direct fall below 1660 levels can weaken the possibility of this move and any further correction is followed with support at 1652/1640 levels.
Indian Gold Futures (June Contract 2012 )
Last week had witnessed with bearish sentiments and prices moved with negative slope for the week. However the decrease in momentum at the end of the week and support formation near 28500 had raised the possibility of a pullback if prices consistently stay above 28575 levels. Gaining strong mood from these level can trigger rally towards 28720/28850 levels. Adding more cushion to the support levels, sell off below 28480 can only negate the possibility of the present set up
The author is a market expert and can be contacted prijath@gmail.com
