Business Daily from THE HINDU group of publications
Monday, Feb 11, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Monday, Feb 11, 2008 ePaper | Mobile/PDA Version |
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Industry & Economy
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Gold & Silver Agri-Biz & Commodities - Technical Analysis Gold may test resistance levels 
Comex gold futures ended higher supported by rising crude oil prices. Gold has recently been a beneficiary of safe-haven buying due to on going uncertainty about other financial markets. Gold rallied even when the dollar was strengthening - a factor normally bearish for gold. Recent rate-cuts, by Fed has also boosted the appeal for precious metals. Also, concerns about power supplies in South Africa that are supporting precious metals - platinum most dramatically but also gold. The market will keep monitoring the US economic data for further direction, although it would be minimal next week. Comex December gold futures moved in line with our expectations. The corrective fall from there to $888 and the subsequent pullback from there has been quite sharp indicating volatile conditions to persist. Supports are now at $907 followed by $893. As mentioned in the previous update, a corrective fall could pose an opportunity to position oneself for a strong rally subsequently to $1,200 levels. As we have been maintaining, going further into 2008 and beyond, we believe there could be a potential for a rise towards $1,200 per troy ounce. Our favoured view now expects a move higher towards $955 as long as the above mentioned support levels holds. We believe that the third wave could have ended at $732 and the fourth wave consolidation at $665, and the fifth wave in progress. There are still no signs of the end of fifth wave. RSI is in the neutral zone indicating that is neither overbought nor oversold. It has now started displaying a negative divergence, a sign of an intermediate top in place. The averages in MACD are still above the zero line of the indicator suggesting bullishness to be intact. Only a crossover below the zero line will indicate bearishness. Therefore, expect gold test the resistance levels. Supports are at $907, 893 and 883. Resistances are at $928, 935 and 955. Gnanasekaar T. (The author is the Director of Commtrendz Research and also 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 : Gold & Silver | Technical Analysis
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