Gold rose on Tuesday with an unexpected fall in U. S. housing starts to record lows in April sharpened risk aversion and pressured the dollar, supporting the metal's appeal as a safe store of value. Gold jumped by $ 5.09 and settled at $927.5 on COMEX.

Experts said that safe-haven demand could diminish as the closely watched Volatility Index fell below 30 for the first time in eight months, indicating the perceived need for portfolio insurance is diminishing.

The Rupee remained firmed against the dollar and ended flat in the last trading session. The U. S. dollar fell slightly against the Euro to close the day at 1.3623.

Gold moved up yesterday due to worse than expected housing numbers from the U. S. We don’t expect major upside in Gold during the day. We recommend selling on rise during the day. As far as silver is concerned, strength in base metals prices is driving silver prices up. We don’t recommend going short on silver for the day.

Gold prices witnessed a slight improvement during the second half of the session. However, gold is seen in a medium term and short term down-trend. Thus, Gold can be sold at higher levels during the day. In near term, gold is expected to take support at
13800 levels.

Silver prices bounced back yesterday from the Support at 21660 levels (50% Retracement level). It even surpassed the resistance at 22040 levels, which indicates strength in Silver. Thus, Silver is expected to remain positive above 22200 levels today with targets of 22500 and 22800.