GOLD

FUNDAMENTALS

Gold recouped all the earlier losses of the session to close with marginal gains as dollar eased after initial firmness, weakness in crude oil prices however contained the gains. Gold futures for February delivery at COMEX edged up $1.3 to close the session at $799.30 an ounce. The contract saw the lows of  $792.50 an ounce during the session.

Dollar started the day on a firm note supported by weak data from euro zone and strong US fund inflow data, but it ended the day well off its highs and even with a slight loss on worries over Tuesday’s housing data as a report showed home builders remained extremely pessimistic in December. The dollar index declined 0.07% to 77.380.

Weakness in crude oil prices capped the recovery in gold on Monday. Crude oil prices extended the recent losses on expectations of hike in production by OPEC.

Gold was under pressure on signs of easing tension in credit markets after recent action by Fed and central banks, but weaker U.S. equities and former Fed Chairman Greenspan remarks on evidence of stagflation lent some support.

The precious metal market is likely to trade sideways in a short run as yearend profit booking, thin trade and shaky currency and crude market would keep it volatile.

TECHNICALS

Dozi like formation shows indecision in the market. Close below short term and medium term EMAs supports bears. MACD is showing decrease in bullish momentum. Stochastic is also heading downward in normal region. Prices may remain volatile with bearish bias.

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