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Tuesday, March 17, 2009

Gold dips for second day

COMEX Gold seen finding a support around $900 mark

Gold moved in a range bound manner today; though the commodity continued to face selling pressure on strong gains in the major Asian equity markets. The sentiments are still edgy for Gold after the metal rebounded last week and the $900 levels continues to emerge as the next immediate support for the COMEX futures

Yesterday, Gold retreated a bit as risk appetite returned in global equities on the latest comments from US Federal Reserve Chairman Bernanke. Bernanke stated that the recession would probably end sometime this year, if the government succeeds in supporting the financial system.

While this pushed up the equities in Asia and Europe, the economic data showed more of a gloom spreading around in the near term. The US industrial production was down 1.4% in February, slightly weaker than expected. The capacity utilization rate fell to 70.9%, the lowest since December of 1982.

The New York Federal Reserve's regional index of manufacturing fell from -34.65 to -38.23 in March while the National Association of Home Builders/Wells Fargo index of homebuilder sentiment remained at 9.0 in February, near the record low.

With all economic indicators displaying a somber mood, Gold is expected to find some a strong support around $900 an ounce mark. The COMEX Gold futures for April slipped from a high of $925.30 an ounce and currently trade at $913.30, down $8.70 an ounce from the previous close.

MCX Gold futures for April slipped from a high of Rs 15260 per 10 grams and currently trades at Rs 15182, down Rs 9 or 0.06% from the previous close. Further dips from hereon may see the counter testing intraday low of Rs 15109 and a break below the same would bring in the watershed Rs 15k mark in the picture.

source: Capital Market
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