GOLD

FUNDAMENTALS

Gold prices rebounded higher on Friday as weakness in dollar and strength in crude oil prices boosted buying in the metal. Gold for December delivery on the COMEX gained $4.5 cents to close at $740.20 an ounce. The contract traded as low as $726.50 an ounce during the session.

The dollar fell against the major counterparts after the reports of an up-tick in US jobless claims and the biggest drop in US factory orders in seven months. At the same time, the euro strengthened after ECB agreed to keep interest rates steady at 4%. The move was widely expected, but some political and business leaders had called for a rate cut.

Signatories to the CBGA are expected to have sold 475 metric tons of gold in the third year of the current agreement, according to the World Gold Council. This is up from 395.8 tons sold in the second year of the agreement.

The South African government has ordered Elandsrand mine of Harmony Gold Mining Co. to be closed for up to six weeks as an investigation into the cause of the accident in which about 3,200 workers were trapped, is carried out.

India's spot gold prices are expected to remain firm during the last three months of the year due to strong local demand, but a rising rupee is expected to erode some of the gains, according to the industry experts.

TECHNICALS

Long lower shadow of candlestick shows tentativeness at lower levels. The prices closed below short term and medium term EMAs, which supports bears. MACD is showing decrease in bullish momentum.  Stochastic has made bearish crossover in overbought zone. Expect volatile price action with bearish bias.

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