Spot Gold to Rally Post 1803 USD

September 26, 2012 at 08:49


Mangal Keshav has come out with its report on Gold, Silver and Crude Oil. According to the research firm, spot Gold prices have witnessed strong break-out & have almost reached our last target of USD 1790. More upside is expected only above USD 1803. Immediate Support holds around USD 1750 per ounce while other Supports are seen at USD 1645.

Gold futures closed modestly higher, supported by upbeat US data on housing prices and consumer confidence, but declined from the session’s high, pressured by comments from a central banker. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,331.33 tons, as on Sept 25. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,015.99 tons, as on Sept 24. South Korea’s gold reserves increased nearly 30%, from 1.75mn ounces in June to 2.26mn ounces in July, or 70.44 tons. Russia also bumped its gold rainy-day fund to 30,113mn ounces in July from 29,516mm ounces in the previous month, as per IMF. Paraguay raised its holdings by 7.527 tons to 8.194 tons 2-months ago, while Venezuela cut its holdings by 3.733 tons to 362.053 tons in that month, as per IMF.

The Philadelphia Fed president Plosser said in a speech the Fed might have to raise short term interest rates “well before” the current forecast of mid-2015, and predicted the Fed’s latest QE3 plan to stimulate economic growth won’t be effective.  The dollar index, which measures greenback’s performance against a basket of six currencies, rose to 79.673 from 79.573 in North American trade on late Monday. Copper futures was up supported by gains in the euro against the dollar, after data showed US consumer confidence jumped to its highest in 7- months in September, but major gains were capped by concerns over demand outlook.

Crude oil futures fell from its sessions higher to close lower, after Philadelphia Fed president questioned QE3, pushing the dollar higher. Brent oil rose to $111 per barrel, as escalating tension over Iran offset plentiful supplies and concerns over the health of global economy. Washington cleared the way on Monday for tighter sanctions against Iran to curb the Middle East state’s nuclear ambitions, while Tehran increased its rhetoric against Israel, heightening concerns about a potential conflict. Expected EIA stocks: Crude oil +1.1mn barrels, Gasoline +0.2mn barrels & Distillate +0.7mn barrels. Natural gas futures closed 3% higher, underpinned by short covering ahead of the October contract expiration on Wednesday, but high supplies, mild weather forecasts and slowing demand continued to limit the major gains.

Gold Prices now holds strong supports at 30810 (50-day SMA), 30240 (100-day SMA) and last at 29325 (200-day SMA). Futures on have closed in Negative for the second consecutive week. Prices have breached our support of 31650. Now next support holds at 31185 & levels discussed above i.e. SMA’s.

Spot Gold Prices have witnessed strong break-out 3-weeks ago & have almost reached our last target of $1,790. We still maintain our positive view, but more upside is expected only above $1,803. Immediate Support holds around $1,750 per ounce while other Supports are seen at $1,645 (200-day SMA), $1,621 (100-day SMA).