Gold closed lower as risk appetite weakened amid lingering credit concerns in Europe and concerns about the pace of the global economic recovery. Gold made a fresh high on this move off 1075 to 1161. The metal has moved back into the middle of last weeks range at current 1129.

We see 1113 as a pivotal support. While above 1113 there is a chance for a move back to 1161/ 1226.50. A break below 1113 will put 1075 in focus. There is a large trend line at 1099 drawn off the August and December lows, 930 and 1075 respectively. For next week, we are likely in for more consolidation trading between 1113 and 1161. Now support for the gold MCX is seen at 16830 and below could see a test of 16807. Resistance is now likely to be seen at 16866, a move above could see prices testing 16879.

Trading Ideas:

Gold trading range is 16600-17050.

Gold last week made a fresh high on this move off 1075$ to 1161$.

SPDR Gold Trust Holdings drop by -0.93 tonnes and settled at 1112.84 tonnes.

Gold may gain on demand for dollar alternative.

SELL GOLD FEB @ 16880-16900 SL 16938 TGT 16858-16826-16800.MCX