The metal still expected to face critical resistances in near term
Gold came back in the action this week, after falling below the watershed $900 per ounce levels last week. The momentum in the yellow metal still looks positive but the latest turnaround in global equities with DOW snapping up 10% gains in three sessions to close above 7000 levels may clutter the sentiments against the yellow metal in near term, which has been vulnerable on the upside after hitting $1000 per ounce levels in the middle of February 2009.
Gold continues to face critical resistances on the way up, even as the global economy stays crippled by a lack of confidence and capital, with lending and investment mechanisms dysfunctional around the world. The tilt of money toward the United States appears to be exacerbating the crisis elsewhere with banks and financial markets in Europe and emerging Asia not witnessing the much needed inflows. The US dollar is continuing to emerge as a direct beneficiary of this anxiety and keeps Gold under pressure as a direct result.
Though Dollar pared some of its recent gains in the current week, the momentum may return in case the global markets fail to extend the current rally. Gold may dip in such a case as the failure of the yellow metal to break above $1000 in a convincing manner, despite of all the positive cues has already cluttered the sentiments as far as the near term dynamics are concerned.
COMEX Gold started the week around $900 an ounce and stepped up to find a resistance around $930 per ounce levels in the today's trades.
MCX Gold futures for April hit a high of Rs 15475 per 10 grams and currently trades at Rs 15425, up Rs 131 per 10 grams from the previous close.