Commodity Trading Tips for Gold by KediaCommodity

Ajay Kumar Kedia 31 January 2014

Gold Gold settled down -1.21% at 29378 after robust U.S. GDP data cemented market expectations for the Federal Reserve to continue dismantling stimulus programs, which fueled demand for the dollar. Signs of stabilization after a sharp emerging market selloff, which had boosted gold prices earlier this week, also hit gold's safe-haven appeal. The dollar rallied after the Commerce Department said GDP expanded 3.2% in the three months to December, in line with most forecasts, even outpacing some, following a 4.1% rise in the third quarter. Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010, exports grew by 11.4%, while government consumption shrank, which drew praise from markets. The data strengthened the dollar by keeping expectations firm for the Fed to continue trimming its monthly bond-buying program, which weakens the greenback pushing down long-term interest rates, thus making gold an attractive hedge. Meanwhile once again India was considering pruning the gold import duty by 2% from the current rate of 10% in view of the demands from the jewellery industry and the increase in gold smuggling. According to officials in the Finance Ministry, the case for a reduction of the import duty had been finalised, but a final decision would be taken closer to the end of current fiscal year on March 31, 2014, as stated by FM Chidambaram. Also SPDR Gold Trust, said its holdings rose 0.60 tonnes to 793.16 tonnes on Thursday. Technically market is under long liquidation as market has witnessed drop in open interest by -40.34% to settled at 3723 while prices down -360 rupee, now Gold is getting support at 29214 and below same could see a test of 29050 level, And resistance is now likely to be seen at 29681, a move above could see prices testing 29984.