International equity markets rallied sharply higher last night, with the US Government support package for Citigroup providing a fillip to investor confidence. The gold price (spot) trended higher last night, benefiting from the softer USD, safe haven flows and physical demand a report from Commonwealth Bank stated. In the domestic market, gold price increased by Rs135/10 grams to Rs13,195/10 grams. On Tuesday, the US dollar has weakened on month end short covering which has resulted in commodity gains. Commodities will track the US dollar and if it weakens further then commodities will rise even more this week, a report from Insignia consultants said.
In the international market $ 801/ounce- $807/ounce is the support level and resistance is at $800/ounce-$825/ounce. Gold needs to break this zone to reach $834/ounce, Alex Mathews from Geojit Financial Services said.
Giving a technical view, Chintan Karnani of Insignia Consultants said, Gold December contract on COMEX (New York Mercantile Exchange’s Commodity Exchange) needs to break $835/ounce-$840/ounce zone else it will fall back to $798/ounce and $782/ounce.
“Silver needs to hold 50 day MA of $10.66/ounce to target $11.12/ounce and $11.56/ounce. On the lower side sellers will emerge if silver fails to break $9.85/ounce,” he added.
In the domestic market technical congestion is there between Rs13,300/10 grams- Rs13,500/10 grams and gold needs to overcome this zone to target Rs14,100/10 grams. If it does not break Rs13,500/10 grams then it will fall to Rs12,700/10 grams and Rs12,300/grams, Karnani said.