MCX Gold: Sustaining above Rs 30850 key to reaching 31000 levels

By Ankush Kumar Jain
On daily charts, gold for February delivery is having a good resistance level at Rs 30850 and support at Rs 30700 for the day. If the futures sustain above Rs.30850, then it may move further up and touch 31000 levels.

Intra-day traders are advised to take along position in gold above Rs.30850 with stop loss of Rs.30700 and wait for the target near Rs.31000.

On India‘s MCX, gold for delivery on February 5 was seen trading at Rs.30842 pper 10 grams, a gain of 0.32% as of 1.10 PM IST. Meanwhile, on the Comex gold for delivery on February 13 was spotted trading at $1673.35, a gain of $3.95 or 0.24%.

Meanwhile, the White House has ruled out any negotiations connected with debt ceiling as Obama holds the view that raising of debt ceiling is not about authorisation for new spending but confirmation from US Congress to service the bills that has already been approved by the US Congress.

“There are only two options to deal with the debt limit,” said White House spokesman Jay Carney. “Congress can pay its bills or it can fail to act and put the nation into default.”

This do-it-or-leave-it stance has injected a dose of uncertainty into the market system, anew.

“It is likely that some fresh speculative money that had been on the sidelines is now starting to trickle back into risk assets like raw commodities. If the U.S. government officials can come to meaningful agreement on taxing and spending matters in the coming weeks, which is still highly debatable, then it would be likely that a heavier flow of speculative money would flow into risk assets.” wrote Jim Wyckoff in a contribution to Kitco News.

“This U.S. taxing and spending issue could be bullish for gold on opposing fronts: increasing investor risk appetite due to U.S. government leaders’ coming to meaningful agreement on the U.S. taxing and spending measures suggests more money likely flowing into raw commodities, including precious metals.” he pointed out.

“Conversely, more bitter wrangling by U.S. government officials and a mostly hollow agreement on taxing and spending measures could see fresh safe-haven investment demand for gold, and to a lesser degree silver.” he added.(Ankush Kumar Jain is Research Analyst, Commodity Online)

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