Gold market rises on short covering, support at 30389

Mumbai-India (Mar 14)  Gold settled up 0.25% at 30549 rose to fresh month highs and was headed for its best weekly gain in four weeks, buoyed by mounting tensions between Russia and the West over Ukraine, and worries over an economic slowdown in China. But Gold prices trimmed the earlier gains after better-than-expected reports on U.S. retail sales and jobless claims reminded investors the Federal Reserve remains on track to continue tapering its monthly bond-buying program.

Currently set at $65 billion in Treasury and mortgage debt purchases a month, the Fed's bond-buying program suppresses interest rates to spur recovery, which weakens the dollar and bolsters gold's appeal as a hedge. From the data side the Commerce Department reported earlier that U.S. retail sales rose 0.3% in February, ending two months of declines and better than market expectations for a 0.2% increase. Core retail sales, which exclude automobile sales, also rose 0.3% last month, beating expectations for a 0.2% rise. Separately, the Department of Labor said the number of individuals filing new claims for unemployment benefits in the U.S. fell by 9,000 to a three-month low of 315,000 last week. The number trimmed gold's gains, as Fed officials have said they'll pay close attention to data when deciding on the pace at which the U.S. central bank scale back monthly asset purchases.

Gold prices didn't flop, however, as a gradual tapering of stimulus programs for this year has already been priced into trading. SPDR Gold Trust, said its holdings rose 2.10 tonnes to 813.30 tonnes on Thursday. Technically market is under short covering and getting support at 30389 and below same could see a test of 30229 level, and resistance is now likely to be seen at 30642, a move above could see prices testing 30735.

Trading Ideas:
--Gold trading range for the day is 30229-30735.
--Gold gained as fears of economic slowdown in China and lingering worries about Russia's standoff with Ukraine over Crimea boosted bullion's appeal
--Earlier prices seen pressure after better-than-expected U.S. retail sales data supported expectations that Fed will continue tapering its bullion-friendly monetary stimulus program.

Souirce: Commodity-Online