• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gnanasekar T.

Gold futures ended lower on Friday, after hitting the highest level in 2006 during the week. Option-related selling, contract expiry, a stronger dollar and week-end profit-booking were some of the reasons for Friday's fall.

Though gold shows good momentum, it is vulnerable to short-term fluctuations due to oil's volatile moves, on the back of the persisting US cold weather. Overall gold looks poised to move higher barring some minor short-term surprises. COMEX gold futures rose higher as expected. As expected, the bullish momentum extended higher and a move above $648 has revived expectations of a retest of $725 or even higher.

Near-term resistance is at $655-56 followed by $676-78. Key supports are now at $636 followed by $630. Move below $630 will result in yet another fall to the recent lows and rise higher again. Favoured view expects, supports at$ 635-36 to hold for an immediate rise to $678. We believe that the third wave could have ended at $732 and the corrective fourth wave still in motion. A break above $678 will signal the beginning of the fifth wave move. RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD have gone above the zero line of the indicator suggesting a bullish reversal. This is one of the key signals prompting a change in trend to bullish from bearish. Prices are above the short-term 8-day period EMA at $640 followed by the 34-day period EMA at $631. Therefore, expect gold to test support levels and then rise higher subsequently. Supports are at $638, 635 and 631. Resistances are at $651, 656 and 674.

(The author is a director at Commtrendz Research and in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

More Stories on : Technical Analysis | Gold & Silver

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Poabs estate - pioneering organic cultivation

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line