• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gold futures, ended slightly lower, ahead of a long weekend. Gold stays trapped in a range between market participants pursuing more risk and those who still seek the safety of a tangible asset such as gold. This will encourage more investment demand, and physical demand has also strengthened on the back of the recent fall in prices. The recent positive economic readings are interpreted as an end to the downturn and players are starting to unload safe-haven gold. However, a universal expectation among gold-watchers that Federal Reserve monetary expansion must blow off into inflation will attract bargain hunters at every fall.

Comex June gold futures are trading in narrow band presently. Support has been seen in the $875 zone for the week. Rallies to $908-10 could prove to be a strong resistance going forward. Price structures continue to display bearish characteristics and the bigger picture indicates a fall towards $845-850 levels as long as $910-12 caps upside attempts. Unexpected rise above $912 could indicate bullish strength for $920-926 levels. Only a daily close above $933 will signal the resumption of the up trend and head higher towards $978 or even higher towards $1,033. We believe that the third wave could have ended at $1,033 and the fourth wave that we have been tracking could have ended at $681 and fifth wave impulse in progress. A daily close above $1,000 is a confirmation of the same. The RSI is in the neutral zone, indicating that it is neither overbought nor oversold. The averages in MACD are below the zero line of the indicator again, suggesting a bearish reversal. Only a cross-over above the zero line of the indicator could signal bullishness again. Therefore, expect gold futures to consolidate and test the support levels.

Supports are at $875, 863 & 845. Resistances are at $895, 910 & 926.

Gnanasekar T.

(The author is the Director of Commtrendz Research and also in the advisory panel of Multi Commodity Exchange of India Ltd(MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

More Stories on : Gold & Silver | Technical Analysis

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line