Crisis makes Gold a perfect choice for investment

By Shyamal Mehta

Gold prices are well supported by geo-political tensions and investment demand which is being emerged from developing countries like India and China. Hedge funds are also buying the Gold because of rising global inflation worries as Gold is considered as a hedge against inflation. USD is also becoming strong against Euro and other major currencies. It means that investors are parking their funds in USD and bullion assets like Gold and Silver.

Gold prices are well supported by increasing concern in Middle East. Gold prices are trading near USD 1400 psychological level.

Gold in international markets last traded strong at 1398 USD an ounce near its seven weeks high. Silver last traded at $32.8 per ounce. Silver prices are presently trading near multi years high of around $34 an ounce which it made two days back. Gold may find supports at 1370, 1361 and 1335. While, resistance levels are 1400 and 1431.

Gold and Silver prices are trading slightly lower in Asian session on Wednesday as the bullion market was overbought from the past few days.

Gold prices have remained volatile in last few trading sessions and are hovering around 1390-1410 levels from last few trading sessions. However, Gold prices are likely to rise and could touch 1410-1425 levels within next few trading days.

Silver prices are being benefitted by global economic recovery and also well demanded as a safe haven asset with Gold.

At MCX, the Indian commodity bourse, Gold April future prices settled marginally up on Tuesday at Rs. 20787 per ten grams against previous day’s close of 20730 up by 57 rupees.

MCX April Gold contract opened weak this morning at 20769, an intraday high at 20774 and last traded at 20750 down by 37 rupees after made an intraday low of 20705.

Support for MCX Gold Apr contract is seen at 20500 and below it; prices can test 20250, while the resistance levels are 21000 and 21300 respectively. Short term range of MCX Gold future prices is 19900-20900.

Traders are eyeing on US Existing Home Sales, Unemplpyment and preliminary GDP q/q data due this week.

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