Gold closed lower due to profit taking on Tuesday as it consolidated some of the rally off February's low. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends this rally, the 75% retracement level of the December-February decline crossing is the next upside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.
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The European Union’s debt crisis continues to drive the global economy. Billionaire Investor George Soros was quoted as saying “Greece still faces the danger of a “death spiral” because the cost of borrowing in the Euro region is too expensive”. It has been reported that Portugal may need additional fiscal aid. This daily scenario is affecting the basis between the the U.S Dollar and the Euro Dollar as the news dictates. It has really been difficult to decipher the conflicting reports. Federal Reserve Chairman Ben Bernanke has pledged to keep the main interest rate low for “extended period” contingent on high unemployment and low inflation. This also helped fuel the gold rally as an interest rate hike would show confidence in the U.S Dollar and most likely send Gold lower.
There was some increased interest from the Asian sector overnight as they held true to their pattern of buying price dips. Wedding season and upcoming festivals are keeping the Jewelers of India busy supplying the insatiable demand.
REPORTS 4/15 / THURSDAY
EXPORT SALES……………………7;30 AM CST
INITIAL JOBLESS CLAIMS……7:30 AM CST
SWING NUMBERS 4/15
RESISTANCE # 2………………$1169.00
RESISTANCE # 1………………$1163.00
SUPPORT # 1...................$1151.00
SUPPORT # 2…………………..$1145.00
NEW YORK, Aug 25 (Reuters) - Gold rose for a second day on Wednesday to an eight-week high above $1,240 an ounce, as investors turned to bullion as a safe haven after bleak U.S. new home sales and durable goods data stirred double-dip recession worries.
The metal's trend has been rising since it hit a low at $1,160 on July 18, boosted by a spate of weak economic data and after the Federal Reserve downgraded its economic outlook.
Gold is about $20 below from its all-time high at $1,264.90 set on June 21.
Gold was boosted by continuing fears after data showed new U.S. home sales slumped to the slowest pace on record in July and orders for costly durable goods were weak, said Adam Klopfenstein, senior market strategist at MF Global's unit Lind-Waldock.
"Until we get some type of conclusion of where the economy is going, gold is going to be well supported," he said.
Silver and platinum group metals climbed on gold's strength, and as the S&P 500 index ended higher, snapping a four-day losing streak due to technical support and bargain hunting.
Spot gold was at $1,240.80 an ounce at 3:47 p.m. EDT (1947 GMT), against $1,229.25 late in New York on Tuesday. U.S. gold futures for December delivery settled up $7.90 at $1,241.30, while gold priced in euros and sterling also hit multi-week highs.
Gold is benefiting from renewed investor demand for safe-haven assets as evidence of a stalling economy recovery mounts, which in turn has pushed global equities to their lowest since early July, when a recovery in risk appetite led prices to retreat from June's record highs.
"This recent leg-up and the quite significant move yesterday post the U.S. housing data is perhaps that trend of safe haven inflows into gold resuming," said RBS analyst Daniel Major.
Spot bullion rallied to a high of $1,241.35 an ounce.
Industrial commodities also fell, as copper, a barometer of economic activity, hitting its lowest in a month.
Gold investors took heart after euro swung back into positive territory against the dollar after the weak U.S. data, having earlier come under pressure on worries about widening peripheral sovereign bond spreads after the previous day's downgrade of Ireland's credit rating.
Gold's strength could be also seen when priced in non-U.S. currencies.
Gold priced in euros hit its highest since July 1 at 981.61 euros an ounce against its previous close at 973.59 euros. Sterling-priced gold reached its highest since mid-July at 803.91 pounds.
A report released by World Gold Council, an industry-sponsored trade group, suggested further support for bullion prices.
The WGC said in its quarterly demand trends report on Wednesday that India and China were likely to provide the main thrust to demand growth this year and predicted investment demand would stay strong.
WGC reported burgeoning bullion investment in the second quarter, notably from Europe, seat of the euro zone sovereign debt crisis. Demand for gold exchange-traded funds quintupled in the quarter, it said.
Investment demand for gold has increased in recent sessions, with holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, rising by nearly 13 tonnes last week, its biggest one-week climb since early June.
Physical gold demand also tends to rise in August as jewelers stockpile inventory ahead of the start of India's festival season, which starts with Raksha Bandhan on Aug. 24 and extends until Dhanteras in November, the biggest gold-buying day.
Spot silver rose 3 percent to $18.89 an ounce from $18.34 on strong investment demand, extending gains after posting its biggest one-day rise in more than three weeks on Tuesday, echoing the climb in gold prices.
Platinum was at $1,523.50 an ounce against $1,510, while palladium was at $491.50 against $482.50. (Additional reporting by Jan Harvey in London; Editing by Lisa Shumaker)
NEW YORK (Dow Jones)--Investors aren't sure how worried they should be about the economic recovery, so they continue to buy gold as a haven but are reluctant to send it to a new record.
Some days bring economic reports that seem to signal a faster-than-forecast recovery, offering participants an attractive place to book some profits from gold's 7% rise since the end of last month. But they usually turn right around and buy those positions back up, as other data continue to prove lackluster, concerns remain about European sovereign debt and some worry about longer-term inflation due to easy money ...
Even though the price of gold has been very robust since its previous lows made in July, it seems to be stalling at current levels between $1220/oz and $1240/oz. However, I firmly believe that it will soon break the previous high of $1265/oz but, before the price of gold sets a new historic high we first need to see it break through the key resistance levels of $1240/oz and then $1260/oz.
Precious metals prices trading down on COMEX today. We expect Gold to remain under pressure during the day. But overall outlook for gold remains bullish, any downside today should be taken as a good buying opportunity for medium term.
SPOT GOLD closed @ 12440 which was BELOW the open and was within prior day's trading range. The High was 0.5 Dollars from Precise Trader's Res Tgt 1 and the Low was 1 Dollars from Precise Trader's Sup Zone 1. The Hourly Oscillators are Bearish but Weak and the Price is Above the MA, so CAUTIOUS approach is needed for the Bears. Hourly Trend is Limited Up while 12340 holds and Daily Trend is also Limited Up while 12225 holds, so expect the price to have a Minimum Upside and the Bulls have to be Cautious. The Daily Trend breached the Prior Day's High but the Bears gained towards the Close which signifies the Bulls are Weakening. The Hourly Trend has been in a Range Trading with a Limited Upside Bias ,12385-340 are the Critical levels to watch to maintain the Bullish Outlook .On the 5 min is along the Horizontal Channel and the Patterns are suggesting a Choppy Session with a Potential to Test the Highs one last time before a Reverse. The Opening Price Principles are Mixed , so Cautious approach is needed until the price breaks out of Zone 1 levels.
BULLS: 12400 12320 12265 BEARS: 12535 12590 12655
Today's Strategies: Trade @ the Bulls & Bears Levels Only.
Never in my life have I seen anything like the plethora of methods which are coming on stream for the use in forecasting commodity prices. There are literally hundreds of techniques and approaches. This article will present rather briefly, but a few
The more methods one uses, the more confused one becomes. it is better to look at the demand supply situation. also since gold is a safety vault during economic crisis, its demand shoots up during these times. so is the prices. but that is not good for the economies as good is not a factor of any production. it has emotional value and not productive value attached to it.