-- Posted Sunday, 18 December 2011 | | Disqus
TODAY
Rupee had weakened to 54.32 against the US dollar last week. As a result gold prices did not fall as much. In September when gold prices fell to $1535 MCX gold prices was around Rs.25000 (per ten grams) and now last week when gold prices fell to around $1560 MCX gold prices fell to Rs.27047 (per ten grams). Nearly Rs.1500 has Indian gold price rise has been due to a weaker rupee against the US dollar.
Oversold technical conditions along with huge physical demand and investment demand will prevent gold and silver from a major fall today.
The reserve bank of India seems to have woken up to the cause of a continuous weaker rupee and has taken a slew of measures to prevent further weakness. This will reduce the pace of depreciation of the rupee (if not the decline).
MCX gold February futures rose to around 29470 in December due to a weaker rupee against the US dollar. If the rupee falls to 50.50 and 48.00 in the coming months (which it should) then even if gold prices rise in US dollar value it may not rise as much in India.
MCX gold prices will find it difficult to break past Rs.30,000 per ten grams unless Usd/Inr continues to weaken. Long term bullishness of gold prices is intact but if the rupee gains against the US dollar then it will take a few months for MCX gold prices to break past Rs.30000. There are a lot of short term gold investors and traders in India. They have lived in an environment where gold prices have had a big invincible run for the past two years. They know that at whatever prices you buy/invest in gold, there is bound to be profit. If Indian gold prices remain stable or fall then some of these short term traders and investors will exit gold investment and that could add pressure on global gold prices as well. But jewelry demand is still not that great and will rise as long as physical gold prices trade over Rs.25000.
Gold is looking bearish in the short term and has a key support at Rs.25523. As long as gold Rs.25523 it will rise to Rs.31547 and Rs.35457. There will be a technical break down below Rs.25547 all the way to Rs.23726 and Rs.20901
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Sunday, 18 December 2011 | Digg This Article
| Source: GoldSeek.com
