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Mar 06, 2013, 03.26 PM IST | Source: Moneycontrol.com

Sell spot Gold below USD 1552: Geojit Comrtrade

Geojit Comtrade has come out with its report on Gold. According to the research firm one can sell spot Gold below USD 1552 with a stoploss of USD 1576 for the target of USD 1525.

Geojit Comtrade has come out with its report on Gold. According to the research firm one can sell spot Gold below USD 1552 with a stoploss of USD 1576 for the target of USD 1525.

Spot gold held steady in a narrow range inside $1585-1565 levels for the last couple of days as investors shifted their attention to strong equity market. The recent spike in stock market made investors more confident over the global economic outlook which dented bullion’s safe haven appeal. Earlier, US Dow Jones index pushed to record highs following an unexpected growth in US service sector. Subsiding fears over the global economy boosted risk appetite among investors, prompting them to turn to equities.

Rumors that the US Federal Reserve may trim down their quantitative easing measures sooner than expected also worried the investors. Investment interest in gold is still on weak side with the holdings of SPDR Gold trust, the world’s top exchange traded fund dropping to a sixteen month low last day an eleventh consecutive session of losses. Meanwhile, the South Korean central bank added 20 tonnes of gold in February to their gold reserve, the fifth purchase of the gold in nearly two years.

The dollar weakened again but the Euro struggled to gain strength as investors stayed on the sideline ahead of the European Central Bank policy meeting. Anyhow, further direction on bullion is likely to depend on the outcome of the US trade balance, jobless claims and non farm payrolls data due this week. Even as the broad negative trend is intact and prices have been consolidating in a tight range for the last few trading days. While below $1600, downside risk still persists but a convincing violation of $1552 is required to pave the way for further liquidation pressure.

A direct slip below the same would reset the bearish tone again and should ideally be held at $1527. A fall past the same would be a deep and fatal and could extend the liquidation as far as $1480. Conversely, unexpected surge above $1620 could dilute hopes of further selling pressure and prompt buying interest. Currently, gold is trading well below the 50, 100 and 200 days moving average, favoring bearish sentiments in the near term. Volumes are gaining strength compared to last few weeks whereas RSI turned higher from the oversold region and is currently placed at 37.

Trading strategies for Gold:

Sell below USD 1552, target-USD 1525, SL-USD 1576.

Sell below USD 1520, target-USD 1480, SL- above USD 1554.

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To read the full report click here

READ MORE ON  Geojit Comtrade, Gold


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