Business Daily from THE HINDU group of publications
Monday, Dec 17, 2007
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Monday, Dec 17, 2007 ePaper | Mobile/PDA Version |
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Agri-Biz & Commodities
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Technical Analysis Gold may consolidate, rise higher Comex gold futures ended lower on Friday, hitting a one-week hurt by a dollar rally after a report showed signs of US consumer inflation and slashed expectations of more aggressive interest rate cuts from the Federal Reserve. The US consumer price index in November rose at its fastest pace in more than two years, which may limit the Fed’s willingness to cut rates and in turn preserve the return on dollar assets. The other key worrying factor is the drop in front-month prices for oil and other commodities against later months could hurt indexes tracking natural resource markets in 2008, after some of their best gains in 30 years. 
Comex December gold futures is still consolidating in a broad range mostly preparing for the next move. Fall below trend line support at $778 will be a sign of weakness taking prices lower towards $765 or even lower. Resistances will now be seen at $805 followed by $815. As mentioned in the previous update, the bigger picture still supports a bullish market for gold ahead despite the recent fall, and therefore we advise caution on getting excessively bearish. We believe that the third wave could have ended at $732 and the fourth wave consolidation at $665, and the fifth wave in progress. RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are still above the zero line of the indicator suggesting bullishness to be intact. Only a cross-over below the zero line will indicate bearishness. Therefore, expect gold futures to consolidate and rise higher subsequently. Supports are at $785, 773 & 765. Resistances are at $805, 815 & 838. More Stories on : Technical Analysis | Gold & Silver
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