Gold was quoted at $889.70 an ounce, down by more than 1%, the biggest in more than two weeks. In the Indian markets, gold went down by Rs 195 to close at 14515 continuing the sluggish demand post Akshay Tritiya and ahead of a long weekend.

The dollar fell against euro as much as 0.9% as the risk tolerance drove the demand of greenback southwards and the US Economic data of home prices came out to be positive. But the downside may be limited because of the swine flu, which may see a safe haven buying.

On Wednesday the US Govt. would come out with the GDP estimates for the first three months 2009. We expect a contraction anywhere between 4.4-5.2%. Silver is expected to trade at $10 -18 /oz owing to the rising demand in investment as a safe haven in turbulent times, CPM Group said in its Silver Yearbook on Tuesday. Demand is stated to grow by mo0re than 50% where as the supply would grow by only 4% even after improved technologies in mining and scrap processing.

Gold prices remain soft in spite of nearing US Stress Test results and lower physical demand in India due to a long weekend post Akshay Tritiya. The ETF holdings are flat after redemption. We recommend selling Gold as the prices may touch Rs 14380 during the day.

Gold looks technically weak having just touched $918, a crucial resistance on Tuesday, edging down from there. Gold closed below $899 which also reflects technical weakness. We might see Gold prices plunging to test $867/oz.