Fundamental News and Triggers

• Amidst persistent concerns about the growing U.S. deficit, gold is still trading at about $3300 thanks to the dollar’s decline, which usually increases the precious metal’s allure as a safe-haven.
• The Congressional Budget Office estimates the recently enacted US tax bill, which is now headed to the Senate, will cost close to $4 trillion, escalating concerns about long-term fiscal instability.
• These worries about growing deficits and increased debt servicing costs are highlighted by Moody’s recent lowering of the US credit rating.
• Gold also benefited earlier this week from heightened geopolitical tensions following allegations that Israel would attack Iranian nuclear sites, which sparked concerns of a wider Middle East conflict.

Technical Triggers

• Gold prices are expected to trade in the range of $3275 (~Rs 95000) and $3375(~Rs 96400) in the near term. Either side breakout or breakdown will give 2-3% movement.
• As suggested yesterday, Silver prices won’t sustain above $34. We saw reversal and profit booking at those levels. Consolidation in this range of $32.5(~Rs 96000) and $34(~Rs 99000) would continue in the near term.

Support and Resistance

 

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