Geojit Comtrade`s trading strategies on Gold

Gold held below $1560 an ounce, tracked by a multi-month low Euro coupled with robust US dollar. Worries over the debt crisis in Europe twisting out of control and crash the global economy triggered selling in Euro zone currency. Bullion elicited selling to cover the losses in other markets and on encouraging economic releases from the US.  The US economy is showing signs of economic revival with cheerful employment and manufacturing figures. At the same time, bullion investors are awaiting the CFTC data on net positions managed by fund and money managers which will be released later the day to get cues over further direction of bullion. However, initiating fresh positions in bullion today is likely to be desisted in the international market owing to the lengthened holiday weekend in the US which observes Memorial Day on Monday.

Late evening burst took prices towards $1577 an ounce but has restricted further upside and drifted lower.  The first sizable move on the day is expected to be on the upside, but should evolve with a dip till 1542 before resuming an upside. A direct rise above 1580 will take prices straight towards the measured objective of 1606 which if cleared should drive out the worries of liquidation and enter prices into the strong bull camp. Enduring chart formations are supportive of a corrective recovery but such sentiments would be dented if prices fall below 1525 with volume. Unexpected sell off below 1520 will call for long liquidation. RSI stays at neutral zone, but probable crossover in MACD is likely to cushion prices in the short run.

Trading strategies

Key levels for the day: Upside: Immediate 1580 then 1596-1606 regions. Strong: 1620/1652/1672.

Downside immediate: Immediate 1541/1530. Strong levels 1520/1508/1480 long term 1390

Buy on dips to 1531 target 1552 SL below 1519

Buy above 1572 target 1596 SL below 1561. Buy above 1620 target 1630/1645 SL below 1605.

Sell on rallies to 1604 target 1568 SL 1621.

Sell on pullbacks to 1568 target 1552 SL above 1582. Sell on pullbacks to 1596 target 1572 SL above 1608

Sell below 1550 target 1530 SL above 1562. Sell below 1508 target 1480/1458 SL1545.

Sell on pullbacks to 1630 target 1600 SL 1645.

Prices expected to be congested inside 1520-1596 with mild positive bias.

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