Today’s session was more like a roller coaster ride, where the index opened positive at 11744, then showed some strength in morning trades & made a high of 11802, but the sentiments turned pessimistic in late afternoon trades and index started drifting lower at nifty went till the low of 11625, however the market regained its momentum in the final hour of trade and finished the day on flat note at 11691.
Chances are we would see a gap down opening for tomorrow. It could well open below the today’s closing of 1161.If this index were to fall below 11625 then it could weaken even further. In that case, it could well fall further to test 11600-level shortly. In case of any recovery swing, unless it is able to cross 11755 through 11825 range such recovery swings would attract selling at higher levels again. Immediately, once it falls below 11625 through 11600 it would start showing more weakness. The support at 11555 would be quite crucial for if that gets taken out decisively it is likely to come down to test levels close to 11500 as well.
Brief Fundamental Update:
· Fed has turned dovish after disappointing economic numbers in the recent past, thereby raising the prospect of rate cuts by the Fed in the near future which is supportive for gold.
· US-China trade war is one of the primary reasons for the distress amongst major economies. Even though U.S. and Mexico trade war tensions have started to ease, US-China trade war concerns are keeping investors on the edge.
· Geo-political uncertainty in the Middle East specifically due to the ongoing tiff between U.S. and Iran is also adding a premium to gold’s price.
· Central Banks have started to accumulate gold and that could keep the yellow metal prices supported at lower levels.
· There has been a significant rise in SPDR holdings and the CFTC data also suggests speculators remain net long.
Price Outlook
· Gold has given a breakout above $1365, a clear close above the same could lead to a sustained upmove towards $1435-1440.
· Domestic gold prices I also holding firm above the break out levels of Rs.33400 and this could trigger further upside in price towards Rs.34030 followed by Rs.34400 zone in the short term.
· We continue to maintain our medium term target for gold at Rs.38000 and Rs.40000.
Chances are we would see a gap down opening for tomorrow. It could well open below the today’s closing of 1161.If this index were to fall below 11625 then it could weaken even further. In that case, it could well fall further to test 11600-level shortly. In case of any recovery swing, unless it is able to cross 11755 through 11825 range such recovery swings would attract selling at higher levels again. Immediately, once it falls below 11625 through 11600 it would start showing more weakness. The support at 11555 would be quite crucial for if that gets taken out decisively it is likely to come down to test levels close to 11500 as well.
Brief Fundamental Update:
· Fed has turned dovish after disappointing economic numbers in the recent past, thereby raising the prospect of rate cuts by the Fed in the near future which is supportive for gold.
· US-China trade war is one of the primary reasons for the distress amongst major economies. Even though U.S. and Mexico trade war tensions have started to ease, US-China trade war concerns are keeping investors on the edge.
· Geo-political uncertainty in the Middle East specifically due to the ongoing tiff between U.S. and Iran is also adding a premium to gold’s price.
· Central Banks have started to accumulate gold and that could keep the yellow metal prices supported at lower levels.
· There has been a significant rise in SPDR holdings and the CFTC data also suggests speculators remain net long.
Price Outlook
· Gold has given a breakout above $1365, a clear close above the same could lead to a sustained upmove towards $1435-1440.
· Domestic gold prices I also holding firm above the break out levels of Rs.33400 and this could trigger further upside in price towards Rs.34030 followed by Rs.34400 zone in the short term.
· We continue to maintain our medium term target for gold at Rs.38000 and Rs.40000.
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