GOLD

FUNDAMENTALS

Gold futures at MCX traded range bound on Saturday. February gold traded in the range of Rs  10351-10371 before closing at Rs 10355 per 10 gm. In the international markets, gold surged higher in a thin trade on Friday as weakness in dollar and strong jump in crude oil prices boosted investment demand of the precious metals. Gold futures for February delivery at COMEX climbed higher by $12.20 to close the session at $815.40 an ounce. The contract saw the highs of  $816.30 an ounce during the session. Profit booking by investors with the approaching year-end is resulting in the prices consolidating around the key $800 an ounce mark with some degree of fluctuation due to thin trading conditions.

The dollar weakened against its major rivals in thin trading conditions on Friday, despite strong U.S. consumer spending data and a higher than expected core inflation figure that showed fading chances of further interest rate cut by Fed. Dollar index slipped down 0.1% to 77.70.

Russia’s gold production in January-November period fell 2% to 151.9 metric tonnes compared with the corresponding period last year, according to the gold producers' union. Gold production from mining declined 3.15% to 135.516 tonnes as compared to January-November 2006. Russia's gold production in 2006 fell to 164.32 tons from 168.068 tons in 2005.

TECHNICALS

The prices closed above short term and medium term EMAs, which supports bulls. MACD is showing decrease in bullish momentum and is on the verge of entering in negative zone. Stochastic is heading upwards in normal region. Prices are likely to remain volatile with bullish bias.

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