Gold is the second-best performer in the UBS Bloomberg CMCI Index of 26 commodities this year, behind cocoa.
Gold in the SPDR Gold Trust, the largest exchange- traded fund backed by bullion, reached a record, overtaking Japan as the world’s seventh-largest gold holding.
MARKET RECAP
Gold prices rose during the last trading day of the year, closing near the $880 mark. Overall, Gold rose 3 percent this year, preserving investors’ money as $30 trillion was wiped off equities and the Reuters/Jefferies CRB Index of 19 raw materials headed for its worst year in a half-century. The dollar index, measuring the currency against six counterparts, fell this month after the Federal Reserve cut its benchmark interest rate to a range of zero to 0.25 percent. The gains attracted money from investors seeking to diversify their portfolios. What’s really driving gold at the moment is pressure on the dollar from the Fed lowering interest rates relative to other foreign currencies and other central banks.
In currency market, the EURO closed lower yesterday against the USD, trading sideways most of the day. The trading range for today is seen between 1.3823 – 1.4146. Rupee lost ground against the USD during yesterday’s trading session, with today’s trading range seen between 48.20 – 49.20.
OUTLOOK
Gold has managed to maintain its strength, closing in positive in 2008. The continued weakness in the USD against other major currencies has been the driving force behind the sharp rally in gold prices. Silver also has moved up but not the same proportion as gold’s appeal as a safe-haven investment far exceeds that of silver. Also, silver being an industrial metal, it has been greatly impacted by the slowdown in global economic growth and falling base metals prices (silver being a by-product of base metals production). Spot Gold continues to meet with resistance around $880 - $885 levels. ONLY a close above this level and sustained trading above the same will lead Spot Gold towards the $920 mark.
On intraday basis, Spot Gold prices have immediate support at $872/$864 whereas resistance is seen at $886/$893. Spot Silver prices shall find support at $11.00/$10.70 whereas resistance is seen at $11.50/$11.70.
MCX Feb Gold has support at 13540/13420 whereas resistance is seen at 13760/13880 levels whereas MCX March Silver shall find support at 18150/17940 whereas resistance is seen at 18610/18860 levels.
Courtesy: Angel Commodities
Now is the best time to own some gold for yourself, this will greatly shield you from the coming economic crisi that is inevitable.
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