FUNDAMENTAL COMMENTS AND VIEW
Gold is becoming expensive again after the International Monetary Fund (IMF) warned that the global recession could last longer than expected. Forecasts for the current year are already pessimistic and there are fears 2010 could also be problematic. This might be prompting global investments in gold, which is considered one of the safest avenues of investment in times of economic distress and uncertainty. The International Monetary Fund calculates global losses tied to bad loans and securitized assets may reach $4.1 trillion next year. It estimates banks face further writedowns of $550 billion in the U.S. and $750 billion in the euro area
China Government has declared that it has bought 454 tonnes of Gold for its reserves since 2003 to 2008 and current Gold reserves stand at 1054 tonnes, making it fifth largest Gold reserve in the world. China's gold buying has been rumored for years, but the country stayed quiet so as not to limit its ability to find favorable prices.
The world leader in gold reserves is United States with 8133 tonnes as on September 2008 that accounts for 76.5% of its foreign exchange reserves. Germany has the second highest gold reserves at 3412.6 tonnes while IMF has 3217, France has 2508 tonnes constituting 58.7% of its forex assets. Italy has 2451.8 tonnes constituting 61.9% of forex reserves followed by Switzerland at 1040 constituting 23.8% of total forex reserves. India is way down at 14th position with gold reserves of 357.7 tonnes representing 3% of total forex reseres.
What's really pushing gold higher is India's buying festival and continued jitters about U.S. banks' stress test results. Around 10 tons of gold have already been imported this month. India will import 25 to 30 metric tons of gold in April after no imports in the last two months due to Akshaya Tritya which falls on 27 April 2009.
TECHNICAL VIEW
COMEX Gold has support at $890 and resistance at $920 and $935. Prices took support at 200 DMA at $860 lat week as suggested. And Prices have sustained above $900 to resume its uptrend.
Buy MCX Gold (Jun) above 14700 SL 14500 Tgt 15000
COMEX Silver has support at $12.4 and resistance at $13 and $13.4
Buy MCX Silver (May) above 21250 SL 20800 Tgt 22000
Monday, April 27, 2009
Monday, April 13, 2009
Weekly View on Bullion
FUNDAMENTAL COMMENTS AND VIEW
Gold fell sharply on last Black Monday to touch $865 on back of the news of the UK official at G20 Meeting proposing of the IMF to sell 403 tonnes gold reserves in order to raise cash in G20 Meeting last week. Silver prices also fell Rs 1000 in a single day. But it was overdone and prices started recovering rest of the week due to weak economic data released. US Consumer confidence slipped in March as people fretted about rising job losses and a deepening recession. Federal Reserve officials feared the U.S. economy might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending, making credit tighter in a weak financial system, minutes of the Federal Reserve’s March meeting show
Another round of negative news of US economy was released on Thursday. The number of continuing jobless claims - those drawn by workers collecting benefits for more than one week in the week ended March 28 - surged another 95,000 to 5,840,000, the highest level since the government started keeping track in 1967. Continuing claims have risen 12-straight weeks and are up well over one million since the start of the year. The unemployment rate for workers with unemployment insurance rose 0.1 percentage point to 4.4%, a 26-year high.
According to Gold Survey 2009 released by GFMS Ltd on Tuesday, it revealed, Gold will re-attain the $1000 mark in the coming months and even break the $1,100 barrier. It also stressed that Global gold mine supply contracted by almost 3% in 2008 resulting in production levels falling to a 12-year low and Indonesia output decreased by 35%, South Africa, 14% and Australia 13%.
Demand is likely to pick up in India in coming days to marriage season and festivals coming through and lower prices will attract buying in this counter. Kerala, Assam and some other north-eastern states will celebrate Vishu (Bihu) in a big way on April 14, and that is an auspicious occasion for people to start new things or buy gold. Again, Akshaya Tritiya, India’s two biggest gold-buying festivals along with Dhanteras, falls on April 27 when citizens, especially in the south, are expected to buy gold regardless of price, as they believe it will ensure lasting prosperity.
TECHNICAL VIEW
COMEX Gold has support at $865 and resistance at $890 and $905.
Buy MCX Gold (Jun) above 14450 SL 14200 Tgt 14750
COMEX Silver has support at $12 and resistance at $13
Buy MCX Silver (May) above 20750 SL 20350 Tgt 21150 and 21450
Gold fell sharply on last Black Monday to touch $865 on back of the news of the UK official at G20 Meeting proposing of the IMF to sell 403 tonnes gold reserves in order to raise cash in G20 Meeting last week. Silver prices also fell Rs 1000 in a single day. But it was overdone and prices started recovering rest of the week due to weak economic data released. US Consumer confidence slipped in March as people fretted about rising job losses and a deepening recession. Federal Reserve officials feared the U.S. economy might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending, making credit tighter in a weak financial system, minutes of the Federal Reserve’s March meeting show
Another round of negative news of US economy was released on Thursday. The number of continuing jobless claims - those drawn by workers collecting benefits for more than one week in the week ended March 28 - surged another 95,000 to 5,840,000, the highest level since the government started keeping track in 1967. Continuing claims have risen 12-straight weeks and are up well over one million since the start of the year. The unemployment rate for workers with unemployment insurance rose 0.1 percentage point to 4.4%, a 26-year high.
According to Gold Survey 2009 released by GFMS Ltd on Tuesday, it revealed, Gold will re-attain the $1000 mark in the coming months and even break the $1,100 barrier. It also stressed that Global gold mine supply contracted by almost 3% in 2008 resulting in production levels falling to a 12-year low and Indonesia output decreased by 35%, South Africa, 14% and Australia 13%.
Demand is likely to pick up in India in coming days to marriage season and festivals coming through and lower prices will attract buying in this counter. Kerala, Assam and some other north-eastern states will celebrate Vishu (Bihu) in a big way on April 14, and that is an auspicious occasion for people to start new things or buy gold. Again, Akshaya Tritiya, India’s two biggest gold-buying festivals along with Dhanteras, falls on April 27 when citizens, especially in the south, are expected to buy gold regardless of price, as they believe it will ensure lasting prosperity.
TECHNICAL VIEW
COMEX Gold has support at $865 and resistance at $890 and $905.
Buy MCX Gold (Jun) above 14450 SL 14200 Tgt 14750
COMEX Silver has support at $12 and resistance at $13
Buy MCX Silver (May) above 20750 SL 20350 Tgt 21150 and 21450
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