Weekly: Gold Prices Likely To Witness Further Correction

MUMBAI (Commoditiescontrol) - Spot gold early this week once again made a high of closer to $1439, thus formed second top and settled lower below $1400 per on during the end of last week. Initially prices spurt on concern over geo-political tensions but subsequently cooled off.

On Friday the US non-farm payrolls data for June has showed that the economy has added more number of jobs than it was anticipated, may delay the urgency for rate cut by US Fed. This has resulted in selling pressure in bullion segment.

On Friday the Indian government in its union budget unexpectedly hiked the customs duty by 2.5% to 12.5%, caught the investors who were anticipating either status quo or a cut in duty.

The hike in customs duty may result in higher gold price, which may lead to slow down in gold demand in India.

Technically also gold is vulnerable to further correction as it has formed double top in as many weeks around $1439 per oz. Expect gold to remain higher volatile with initial support at $1381 and then at $1360 per oz. As far as $1439 is not violated the short term trend is slightly down for gold.

MCX Aug-gold

MCX august gold last week made a record high of INR 35100 per 10 gm and finally settled around INR 34467 per 10 gm.

Gold moved up by nearly INR 3800 per 10 gm in the last five weeks or so and as we rightly mentioned touched as high as INR 35100 and then came under profit booking signaling near term pause in the current bullish momentum.

Prices may take correction for the recent upsurge and may retest 33500 per 10 gm going forward.

MCX Silver July

Last week silver made the high of INR 38940 per kg and soon may be heading towards INR 41000-41500 by the end of August or first half of September.

Silver is on the continuous up trend since May last week and so far has gained by INR 2700 per kg.

Silver may take support around INR 37300-37500 and in any case unlikely to drop below INR 37000-36500 levels, which should be considered as good levels to enter long.

Silver spot

Silver also faced resistance at higher levels and came under pressure along with gold.

Silver spot settled lower around $14.95 per oz. Silver last week made a low of $14.85 per oz.

Downside is limited to $14.7-14.6, while upside could extend till $15.40-15.65 per oz going forward, may be in about a month or two.

(By Commoditiescontrol Bureau)