Gold Analysis and Forecast

Gold Analysis and Forecast 25 November 2013 Trend is Negative

Last week Gold prices tumbled 3.36%,week settled at $1244.10/ troy ounce posting the biggest weekly loss in ten weeks. Gold futures ended Friday’s session little changed near a four-month low concerning the fears of tapering of the bond-purchasing program as soon as December by Fed.

Since April 2013, prices of Gold have largely tracked shifting expectations as to whether the federal Reserve would start tapering its $85 billion per month asset purchase program by the end of the year.

On Thursday price for December contract fell to $1235.80/ troy ounce , the lowest level since July 9, 2013. Gold futures for December delivery inched up 0.04% on Friday at New York Mercantile Exchange.

Sell pressure increased after minutes of the Federal Reserve’s October meeting on Wednesday. Fed sang the same old tune, if the economy growth continues to improve as expected then the central bank could start scaling back its $85 billion bond asset purchasing program in the “coming months”. There was nothing new in Federal Reserve minutes however tone was supportive . Traders interpreted that FEd may start its programme of tapering in asset purchase in December 2013. There are great chances that Mr. Ben will through the ball in court of Janet Yellen, the new nominee of FED chairperson by president Obama .

A series of US data on the housing sector,Pending Home Sales (Monday), Building Permits (Tuesday),Housing Starts(Tuesday),Building Permits(Tuesday),Housing Starts(Tuesday) will be released.Market players will observe data closely. Similarly US data relating Unemployment Claims, consumer confidence and durable goods orders will be hot issues during this week.

The RSI is supporting Sell,MACD is heading down and STOCHRSI is oversold all signals are collectively supporting a negative trend ahead. Ichimoku clouds are also blocking the bullish movements.

Support               1235.00 1220.00 1210.00 1200.00 1185.00

Resistance         1240.00 1252.00 1261.00 1268.00 1278.00

Gold Forecast

Our short is active from 1249.50 , we suggest moving stop loss at 1240 Target is same i.e @ 1225. We may short again at 1244 keeping stop loss at 1254.

Based on the details above we may short the metal again at 1244 keeping stop loss at 1254.