GOLD

FUNDAMENTALS

Gold declined sharply on Tuesday as stronger dollar and weakness in crude oil prices triggered profit booking in the metal. Gold for December delivery on the COMEX shed $17.80 an ounce to close the session at $736.30 an ounce. The contract saw the lows of $730.80 an ounce during the session, its weakest intraday level since Sept. 25.

The dollar strengthened against major counterparts for the second consecutive session Tuesday, ignoring the weak home sales data and decline in US stocks as traders booked profit ahead of nonfarm payroll data due on Friday. The Dollar Index moved higher by 0.5% to 78.30. The talks of an emergency ECB meeting and recent complaints of E.U. exporters and politicians over the strong euro induced short covering in dollar.

Weakness in crude oil prices on concerns of slowdown in the economy also pressured gold prices.

The news of a possible strike in Peru will disrupt supplies supported gold. Peru’s union officials are planning a national strike starting Nov. 5. This might impact output at the Yanacocha gold mine, one of the world's largest gold mine.

Turkish gold bullion imports fell 48.9% to 13.605 tons in September from 26.604 tons a year earlier, according to the report of the Istanbul Gold Exchange.

TECHNICALS

Doji like formation of candlestick shows indecision in the market. The prices closed above short term and medium term EMAs, which support bulls. MACD and stochastic are supporting bulls, however overbought levels of stochastic warrants caution to bulls.

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