GOLD

FUNDAMENTALS

Gold witnessed roller coaster movements on Friday guided by volatile dollar. Gold for April delivery fell $14.50 to end at $913.50 an ounce on the New York Mercantile Exchange. The contract earlier saw the high of $941.8 an ounce before slipping to the lows of $908. Gold declined $2.70 during the week from last Friday's closing level of $916.20.

The U.S. dollar index initially dropped under 75 near a new record low after the poor jobs report, but it then rebounded to find a gain after manufacturing data came in better than expected. Dollar index climbed to 75.48. With the Dollar firming and macro economic sentiment somewhat moderating in the face of the US economic data flow, profit taking emerged in gold market to pressure the prices.

India's gold imports for 2007 are estimated at 800 tonnes, down from an earlier estimate of 1,000 tonnes, according to the World Gold Council. The amount of gold imported into India might be less than earlier expectations because of a slowdown in physical demand as a consequence of the sharp rise in prices.

Gold Fields Ltd. said on Friday that South African power supplier Eskom Holdings Ltd. has reinstated plans allowing mines to increase power usage to 90% of normal from 80%. The problems in power supplies are hurting the operations of gold miners in the country.

Mexican gold production inched higher in November from the year-ago month by 6% to 3,538 kilograms, according to the National Statistics Institute.

TECHNICALS

The prices closed below short term EMA that supports bears in short run. MACD has made bearish crossover in positive region. It is also showing bearish divergence with the prices, thus the prices are likely to correct.  Stochastic has made bearish crossover in overbought region. Gold may trade range bound with bearish bias.

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