Spot Gold has support at USD 1625-1595: Angel Commodities

Angel Commodities has come out with "commodities weekly tracker" report. According to the research firm, in the coming week, gold prices are expected to trade with a bearish note on the back of worries amongst market participants over the resolution of the fiscal cliff issue. Investors might adopt cautious approach as the deadline to the fiscal cliff is nearing. Spot Gold has support USD 1,625-1,595 and resistance USD 1,695-1735.

Gold Weekly Price Performance

Spot gold prices declined 2.5 percent. The yellow metal touched a weekly low of $ 1,635.09 /oz and closed at $ 1,656.61 per ounce on Friday.

On the MCX, Gold February contract ended 1.1 percent lower taking cues from weakness in the spot gold prices. Gold prices on the MCX closed at Rs. 30,888 /10 gms on Friday after touching a low of Rs. 30,370 / 10gms. Depreciation in the Indian rupee however, cushioned sharp fall in gold prices in the last weeks.

ETF Performance

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchangetraded fund, fell 0.04 percent to 1350.82 tonnes till December 21
st, 2012 as compared to 1351.42 tonnes till December 14th, 2012.

Factors that influenced gold prices

Worries over the US fiscal cliff which remains unresolved.

Strength in the DX. Republican law makers with held support and cancelled vote to raise tax rates for the annual income above $1 million. The fiscal cliff issue which is nearing the time deadline of December, 31 2012 is creating bearish market sentiments. If the US law makers are unable to resolve the fiscal cliff issue, automatic spending cuts and tax hikes will be implemented.

Outlook: In the coming week, we expect gold prices to trade with a bearish note on the back of worries amongst market participants over the resolution of the fiscal cliff issue. Investors might adopt cautious approach as the deadline to the fiscal cliff is nearing. Safe haven buying might also be initiated as uncertainty is imminent. In the domestic markets depreciation in the Indian rupee might support an upside in the gold prices on MCX.

Weekly Technical Levels
Spot Gold: Support $1,625/1,595 Resistance $1,695/1735. (CMP: 1663.7)
Sell MCX Gold Feb between 31200-31250, SL - 31550, Target - 30710 (CMP:30834)

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