GOLD

FUNDAMENTALS

Gold prices finished slightly higher in choppy trade on Monday after reaching a two-week high, as falling crude oil prices and US stocks took a toll on bullish sentiment based on a weaker dollar. Gold futures for December delivery at COMEX settled $1.8 higher Monday at $826.50 an ounce after trading as high as $837.20 an ounce.

The dollar edged lower against the euro and a basket of major currencies as renewed credit market worries reinforced expectations that more Federal Reserve interest rate cuts are imminent to boost an ailing U.S. housing market. The dollar index slipped down 0.2% at 74.910. A falling U.S. currency makes dollar-denominated metals cheaper for holders of other currencies.

Russia’s gold production during January-October fell 2.41%(YoY) to 138.929 tonnes according to the figures released by the Gold Producers' Union. Gold mining produced 124.153 tons, 3.61% less on the year. Gold output from scrap increased by 21.39% to 4.569 tonnes. Russia's gold production in 2006 fell to 164.32 tons from 168.068 tons in 2005.

The demand for gold exchange-traded funds in India is subdued due to high returns from equities and rising interest rates. Total holdings by four Indian gold ETFs are about 4.5 tonnes against 590 tonnes of US based StreetTracks.

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 see firm bias.

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