Gold May Witness Flat At 28527, 28165-28761 Range
CommodityOnline | Apr 22, 2014 05:34AM ET
Gold settled flat at 28527 dropped from the day's high after a forward-looking U.S. economic indicator came in slightly better than expected and gave the dollar support. The metal was also hurt by a spurt of technical selling after it was unable to hold on to the $1,300-an-ounce level hit early in the trading session. In the U.S. earlier, the Conference Board reported earlier that its index of leading indicators, which measures future economic activity, increased 0.8% in March after a 0.5% rise in February, beating expectations for a 0.7% reading.
Elsewhere, the Chicago Fed National Activity Index decreased to 0.20 in March from 0.53 in February, in line with expectations. The numbers reminded investors that even though the timing of rate hikes in the U.S. remains unclear, the Federal Reserve remains on track to continue tapering its monthly bondpurchasing program this year as the economy recovers. Fed bond purchases, currently standing at $55 billion a month, weaken the dollar by suppressing interest rates, making gold an attractive hedge while such policies remain in effect. Also Soft Japanese trade figures boosted the dollar further, which tarnished gold's appeal on Monday. While SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 3 tonnes to 792.14 tonnes on Monday. Last week alone, outflows from the fund - closely watched due to the size of its holdings - totalled 9.3 tonnes, erasing all the gains made in the year.
Technically market is under fresh buying as market has witnessed gain in open interest by 6.68% to settled at 10019 while prices up 22 rupee, now Gold is getting support at 28346 and below same could see a test of 28165 level, and resistance is now likely to be seen at 28644, a move above could see prices testing 28761.
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