U.S. gold futures continued its gains yesterday as dollar fell further against its major counterparts after the Federal Reserve slashed its key interest rate to just about zero to save the U.S. economy. The decision increased the appeal of the precious metal as an alternative investment, in spite of the drooping oil price.
The greenback remained under pressure, a day after the Federal Reserve decided to cut interest rates to historic lows and expand a program of extraordinary lending and other measures to attempt to lift the U.S. economy out of recession.
In a historic move, the Federal Reserve on Tuesday cut its target for the federal funds rate to a range of zero to 0.25 percent, a record low, from 1.0 percent.
Yesterday crude futures fell sharply despite OPEC announcement that they will be cutting oil production by 2.2 million barrels per day as of January 1st, the largest cut ever.
At the same time according to the report from The Federal Reserve, industrial production was down 0.6% in November and down 5.5% from a year ago, a little better than expected.
International spot gold traded in the range $ 881.20- $ 846.50a Troy Ounce and last quoted at $865.30
Weekly Outlook (DG. OCT.)
Expecting continuation of uptrend above $836.20.Resistances are $856, $868, $888 and $899. Supports are at $818, $808, $794 and $777.
Last day DGCX Gold FEB. Traded in the range $879.50-$848 and closed at $ 869.10
