Gold prices may trade in a small range today
New York (Apr 20) Weekly Outlook: Gold was largely in a broad range for most of last week with closing at Comex platform was flat to $1203 per ounce. If we track the major cues from the US; greenback had a highly negative week with USDX slid 1.8% to 97.50 mark. Dollar fell as economic cues came lower than expected making markets questioning that the overall subdued sentiment in the economy is just a correction due to harsh weather in Q1 or actually a sustained problem. In a normalized scenario; weaker USD supports gold commodity as an alternative investment bet; still lower actual consumption scenario kept it in a range. As we move into the next week, we have the important event in India the Akshaya Tritiya festival on 21st April. During past few years this day has become a major day for investing into gold. We are not expecting this year to be a blockbuster performance for gold consumption; though moderate optimism may seep-in. Any major buying though is seen missing as weaker monsoon in the 2014-15 fiscal year could keep a cap on consumption from rural India which consumes over 2/3rd of the commodity in the country. Also, government’s regulation of PAN cards to be presented when purchasing over Rs 1 lakh worth of gold could deter bulk buyers for investing. Onto the macro-economic aspect, there are not much major data variables to watch from the US or the EU which should keep broader markets in a stable mode. We believe traders can initially buy and later sell the commodity from higher levels in the coming week in India and at Comex markets respectively.
OUTLOOK: Bullion was little moved today as markets await fresh cues over economic side globally whereas locally traders look at the Akshaya Tritiya festival falling on Tuesday this week. Gold last week was largely in a range though intraday volatility continued to be higher as markets looked at weaker set of economic cues from the US meanwhile physical demand remained under pressure especially in the Asia region. Gold prices may trade in a small range today as markets await the major event locally whereas internationally there are no major data. Intraday bias may stay marginally positive due to local cues along with weaker USD and equities; however overall it may remain in a constricted ranged due to lower actual demand expectations for the commodity. We recommend only momentary trades for the day in gold.
Source: MoneyControl
