Commodity Trading Tips for Gold by Kedia Commodity

Ajay Kumar Kedia 18 July 2013

Gold Gold yesterday settled down -0.46% at 26347 after Federal Reserve chief Ben Bernanke said the U. S. central bank still expects to start scaling back its massive bond purchase program later this year. Bullion briefly rose above the $1,300 mark after Bernanke said in testimony before a congressional committee that he left open the option of changing stimulus exit plans if the economic outlook grew worse. However, the rally quickly faded after Bernanke reiterated that the Fed would likely reduce its program of buying $85 billion of bonds a month, known as quantitative easing, later in 2013 and halt it altogether by mid-2014. Gold price on domestic market got support as rupee posted slight falls on Wednesday as continued dollar demand from importers eroded early gains from the government's decision to relax foreign direct investment rules in various sectors. Meanwhile Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 939.07 tons. Gold has fallen nearly 25 percent this year, hurt by fears the Fed is set to curb its bond buying. The Fed's purchases have driven gold to record highs by pressuring long-term interest rates while stoking fears about inflation. Fed policymakers earlier this year indicated that the US central bank could rein in its stimulus program, but Bernanke's comment last week about the need to keep an accommodative monetary policy triggered a gold rally. Technically market is under long liquidation as market has witnessed drop in open interest by -2.53% to settled at 11735 while prices down -122 rupee, now Gold is getting support at 26126 and below same could see a test of 25904 level, And resistance is now likely to be seen at 26684, a move above could see prices testing 27020.