This article was published in Business Standard, India’s second largest financial publication. India is very important for gold. Please scroll down to see Nigam’s comments.
Gold heading towards no man’s land
by Rajesh Bhayani
Gold prices are heading into no man’s land. While the yellow metal’s price has fallen sharply in the last few days, keeping in line with the fall in crude oil prices since the two commodities usually move in a similar direction, it may now be entering an uncertain era
The reasons are many. Technically, gold is oversold and, as of now, has found support near its technical support level. However, according to experts, subsiding geopolitical issues and the certainty of a rise in US interest rates next month makes it difficult for gold to rise sharply in the medium term.
On Friday, the yellow metal dipped to $1221 per ounce, a two-month low level, while silver had a double whammy as it fell sharply to $16.3 in US Comex division of ICE exchange. In one month, gold was down 2.7 per cent, while silver was down 10.8 per cent. In India, the scene is not rosy. Gold was down 3.3 per cent in a month to close at Rs 28,905 per 10 gram. Silver also fell nearly 10 per cent to close at Rs 3,8625 per kg. On Monday morning, gold was trading at $1231 and silver at $16.44.
Nigam Arora, the author of the famous Arora report and an expert in international financial markets, said, “Gold is in no man’s land. It is technically oversold at a support zone of $1220 – $1226, this was a perfect set up for a rally.” However, he said that the strong employment report announced on Friday in the US was supportive of the US Federal Reserve raising interest rates…Read more at Business Standard
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