GOLD
FUNDAMENTALS
Gold futures at MCX traded range bound on Saturday. The most active February contract traded in the range of Rs 10114-10151 before finally closing the session at Rs 10145/10gm with a gain of Rs 25. In th international markets Gold declined sharply on Friday on end of the month profit booking as weakness in crude oil prices and firmness in dollar induced traders to lock in gains. Gold futures for December delivery at COMEX settled down $13.20 at $789.10 an ounce. The contract declined sharply during the week accumulating a loss of $42.70 during the period.
The dollar inched further higher on Friday despite some bearish signals from economic data and rising expectations of interest rate cut by Fed. The dollar index rose 0.7% at 76.125.
The recent sharp decline in the prices seems mere correction in long-term bull market. It has delayed the gold’s march to the all time high levels, but overall it is still bullish in medium to long term. Gold ETFs are still holding a huge amount of gold in their vaults, which speaks of healthy investment demand. Holdings in the world's largest exchange-traded fund, streetTracks, hit a record-high 609.33 metric tons recently.
However, some volatility is likely in the current month due to end of the year profit booking, depending upon movements in dollar, crude prices and stocks.
TECHNICALS
Prices have closed below short term and medium term EMAs, which supports bears. MACD is showing decreasing bullish momentum. RSI is heading downward in normal region. Gold may trade volatile with bearish bias