US Gold futures fell yesterday as strong dollar, as well as liquidation pressure because of a tight credit market. Deteriorating global economy and weaker equities, investors cut riskier assets also weighed on gold prices.
Weakness in crude price is another factor affected the precious metals movements. U.S. crude futures settled on Tuesday below $60 a barrel for the first time since March 2007 as demand concerns due to the ailing world economy .Crude futures fell sharply even after a fresh indication from OPEC of another output cut.
China's stimulus packages also failed to hold energy prices at higher levels. China launched an economic stimulus package on Sunday worth nearly $600 billion for supporting ailing economy. This plan is for 2 years and Funds from the stimulus package will be spent in ten major areas that include low-income housing, rural infrastructure, water, electricity, transportation and improvements in the environment. And also expected it will improve the current global economic condition by improving the domestic demand.
At the same time the U.S. Labour Department said that the unemployment rate increased from 6.1% to 6.5% in October, the highest in fourteen years. Non-farm payrolls declined 240,000 in October, a bigger loss than was expected as-200 k.
In the last week US Gold futures recovered despite steady dollar and weak oil prices. Most of the data’s released in the last week were mixed in US and resultant a range bound movements in dollar.
International spot gold traded in the range $749
- $726.10 a Troy Ounce and last quoted at $745.5.
Weekly Outlook (DG. OCT.)
Expected to trade within the range $761.80 to $727, breaking of either a side makes the direction, Resistances are $745 $762, $778, Supports seen at $717, $707 and$ 683.
Last day DGCX Gold Dec. traded in the range $746– $726.50and closed at $733.90
