19-Jun-13

GOLD REPORT
A Daily Outlook on Spot Gold Analyst: Hareesh V.
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Outlook:
Spot gold inched lower after pausing in a tight range for the last few trading session as investors turned cautious ahead of the key US Federal Reserve policy meeting and on strong equities. The two day Federal Reserve meeting started yesterday and the policy statement is due later today followed by the Fed Chairman Bernankes news conference. Uncertainty whether the US Fed will scale back or halt its prevailing $85 billion bond buying program snapped support for gold. Earlier, the US Consumer Price Index showed inflation stabilizing in the country in May after a long decline. Meanwhile, physical demand for gold from the top consumer India is subdued as the peak marriage season ended and on stringent measures taken by the government to curb imports due to widening current account deficit. Previously, the Indian government had raised the import duty on gold by a third and restricted gold financing by banks. Demand from the second top buyer China too seems lackluster. At the same time, investment interest in gold still looks feeble with the SPDR Gold Trust, the worlds largest gold backed exchange traded fund, falling 0.2 percent yesterday to their lowest level in more than four years. A flat trading range is being witnessed inside $1398-1358 regions for the last couple of weeks. Enduring chart formation suggests that intraday bias should largely stay negative. Repeated and successful attempts to edge down below $1358 would take prices lower towards $1320 initially, which if given away would call for steep fall to $1280/1212 or more. A possible downside crossover in MACD and Bollinger Bands also signifies weakness in the counter. The 50,100 and 200 week moving averages suggest implied weakness as well. At the same time, inability to break the support of $1358 would call for choppy trading. A direct rise above $1408 would stretch the trend as far as $1421 but in a broader picture, it requires a close above $1510 for bigger rallies.

Trading strategies: Key levels for the day: Downside Immediate 1358/1338/1320/1280/1232 followed by 1212/1100 Upside Immediate: 1376/1392/1404/1421/1430/1448/1458-1462 followed by 1510. Sell on pullbacks to 1420 target 1392 SL above 1448. Sell on pullbacks to 1398 target 1372 SL above 1420. Sell below 1358 target 1340 SL above 1376. Sell below 1338 target 1280 SL above 1372 Buy above 1422 target 1442 SL below 1406. Buy above 1448 target 1488 SL 1414 Buy if unable to break 1358, target 1378 SL below 1352. Buy above 1392 target 1408 SL below 1378 Even as intraday bias looks feeble, breaking any of the sides of 1398-1358 regions would be required for suggesting fresh directional moves. MCX Aug: Intraday Levels are: Resistance seen at: 27980/28180/28350/28700/29200 Supports: 27800/27720/27500/27220/26950/26800

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Disclaimer: Trading/investing in Commodity Derivatives involves considerable risk and you may lose part or all of the initial investment. It is not ideal for all types of investors, and you are advised to seek professional assistance before the same. Past performance may not necessarily be repeated in the future. The news and views posted on this report are based on information, which are believed to be accurate. They are provided to enable you to make your own investment decisions and should not be construed as investment advice. The author, directors and/or employees of Geojit Comtrade cannot be held responsible for the accuracy of the content posted on this report or for decisions taken by the readers based on such information.

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