GOLD

FUNDAMENTALS

Gold futures traded range bound at MCX on Saturday. December gold traded in the range of Rs 9581-9591 before closing at Rs 9589 per 10 gm. In the international markets, gold declined on Friday as firmness in dollar on stronger-than-expected U.S. retail sales pressured the prices. Gold for December delivery on the COMEX lost $2.90 to close the session at $753.80 an ounce.

Dollar strengthened on the last trading day of the week after strong Retail sales data. Retail sales rose 0.6% against 0.2% increase expected by market.

Meanwhile, Comex gold futures reached record open interest levels for the fifth consecutive day Thursday. The open interest in gold futures peaked at 475,644 contracts, surpassing the previous record of 443,912 contracts set on October 3.

Morgan Stanley forecasts the 2008 gold price at $800 a troy ounce, and keeps its previous forecast for 2007 unchanged at $680/oz. According to it global growth remains strong, while inflation problems seem to be spreading.

Central Bank gold sales during the fourth year of the Central Bank Gold Agreement are likely to fall short of the annual 500 tonnes quota after Germany's announcement that it won't take up its allocation. Gold sales during the third year of the agreement that ended on Sept. 26 totaled 475.75 tonnes.

TECHNICALS

The prices closed above short term and medium term EMAs, which supports bulls. MACD is turning flat and is giving no clear indication at this stage. Stochastic is supporting bulls in normal region. Prices are likely to move with positive bias.

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