Gold gained as comments by German Chancellor Angela Merkel and disappointing U.S. manufacturing and housing data fueled speculation that central banks may be set to launch more bullion-friendly stimulus measures. Further monetary easing would benefit gold by boosting liquidity and maintaining pressure on long-term interest rates, keeping the opportunity cost of holding bullion at rock bottom, as well as fuelling inflation fears and weighing on the dollar. Gold imports have already declined due to a doubling of import duty, and the drought could further dent demand from rural areas. Festival season began last week in India, the world's biggest consumer of the yellow metal last year, and will peak in November. However, softer-than-expected inflation data reassured investors that price pressures would not prevent the Fed from launching more QE if a more negative view of growth emerges. A closely watched report from the World Gold Council showed that demand for physical gold from jewellers and investors fell in the second quarter to its lowest level since the first three months of 2010. Gold consumption fell 7 percent or nearly 76 tonnes to 990 tonnes as a drop in buying in major consumers India and China outweighed a record quarter for central bank purchases. Now technically market is trading in the range as RSI for 18days is currently indicating 51.89, where as 50DMA is at 29956.08 and gold is trading above the same and getting support at 30034 and below could see a test of 29964 level, And resistance is now likely to be seen at 30163, a move above could see prices testing 30222.
Trading Ideas:
Gold trading range for the day is 29964-30222.
Gold gained as comments by Merkel and disappointing U.S. manufacturing data fueled speculation of stimulus measures
Further monetary easing would benefit gold by boosting liquidity and maintaining pressure on long-term interest rates
Gold imports by India slumped 56 percent in the second quarter after record prices discouraged buyers
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