Gold expected to remain volatile
Gold is expected to see volatile trading within a wide range much like the past week.
By Deepa Krishnan, TNN |
MUMBAI: Gold is expected to see volatile trading within a wide range much like the past week. Traders are keenly watching the movement of the dollar and the performance of the US economy with 15 key economic indicators being announced in this week.
According to India Bullion head of research, Krishna Nathani, gold will be range bound and will get a clear direction when activity picks up after the Labour Day (September 4) weekend in US. On the technical front, gold sees crucial support at $618 per ounce. Beyond this, it is likely to fall to $608 and then $600 levels. On the upside, it could be bullish if it breaches $632, after which it could touch $643 and $655 levels.
Last week, gold futures rose Friday and closed the week higher by $9 on the back of rising crude prices. December gold, the most active contract on the NYMEX, closed at $630.80 per ounce from $621.7 last Friday.
The US Federal Reserve chairman, Ben Bernanke’s statements on Friday failed to impact the market as the question mark on the direction of the US interest rates still loom large.
Significant economic indicators expected this week in US include the GDP, personal income and spending, non-farm payroll, unemployment data and University of Michigan sentiment index.
These would offer clues on what to expect in the next meeting of Federal Open Market Committee (FOMC) on September 20.Analysts point out that the dollar, which has so far been bearish and has seen near lows, is oversold. If the dollar becomes buoyant, money could move out of gold and into the purchase of the dollar, cooling the yellow metal.
On Friday, the dollar surged to a five-week high against the yen, when prospects of another rate hike this year in Japan was ruled out after the inflation numbers came in. It saw little change against the euro.
In the Indian derivatives market last week, gold rose to Rs 9,550 per 10 gram in the October futures on the Multi Commodity Exchange from Rs 9,444. September silver closed higher at Rs 19,143 from Rs 18,745 per kg last week.
According to India Bullion head of research, Krishna Nathani, gold will be range bound and will get a clear direction when activity picks up after the Labour Day (September 4) weekend in US. On the technical front, gold sees crucial support at $618 per ounce. Beyond this, it is likely to fall to $608 and then $600 levels. On the upside, it could be bullish if it breaches $632, after which it could touch $643 and $655 levels.
Last week, gold futures rose Friday and closed the week higher by $9 on the back of rising crude prices. December gold, the most active contract on the NYMEX, closed at $630.80 per ounce from $621.7 last Friday.
The US Federal Reserve chairman, Ben Bernanke’s statements on Friday failed to impact the market as the question mark on the direction of the US interest rates still loom large.
Significant economic indicators expected this week in US include the GDP, personal income and spending, non-farm payroll, unemployment data and University of Michigan sentiment index.
These would offer clues on what to expect in the next meeting of Federal Open Market Committee (FOMC) on September 20.Analysts point out that the dollar, which has so far been bearish and has seen near lows, is oversold. If the dollar becomes buoyant, money could move out of gold and into the purchase of the dollar, cooling the yellow metal.
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On Friday, the dollar surged to a five-week high against the yen, when prospects of another rate hike this year in Japan was ruled out after the inflation numbers came in. It saw little change against the euro.
In the Indian derivatives market last week, gold rose to Rs 9,550 per 10 gram in the October futures on the Multi Commodity Exchange from Rs 9,444. September silver closed higher at Rs 19,143 from Rs 18,745 per kg last week.
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