GOLD

FUNDAMENTALS

Gold tumbled in choppy trade on Tuesday as investors took profits on the back of lower oil prices and a firmer dollar. Gold futures for December delivery at COMEX settled down $12.5 at $814.00 an ounce.

The dollar ignored bearish data on U.S. consumer confidence and home prices and firmed modestly against most major currencies, supported by gains in US stocks and by news that Abu Dhabi will make a $7.5 billion investment in Citigroup. The dollar index rose 0.3% at 75.115.

Chile’s gold output during November was 3,584 kilograms, a 2.5% on-the-year drop, according to the Chile's government statistics agency, INE.

HSBC revised up 2007 average gold price estimate to $695 per ounce from $680, 2008 forecast to $720 from $660 on flight-to-quality buying, U.S. monetary policy, inflation concerns contributing to USD weakness. Further ahead, HSBC also raised its long-term forecast for 2010-2015 to $600 from $550.

Goldman Sachs cuts its federal funds rate target to 3% by mid-2008, from a forecast of 4% previously. The bank cites the worsening housing downturn pushing the risk of a US recession in 2008 to 40%-45%, from around 30% previously.

TECHNICALS

Prices have closed above short and medium term EMAs, which supports bulls. MACD is showing decrease in bullish momentum. RSI is heading upwards in normal region. Stochastic is also running upwards in normal region. The prices are likely to volatile action.

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