Bullion Metals Next Week Outlook

Gold prices resumed its upward movement in the week ended on Oct 29, after having taken a dip in the penultimate week. The upcoming week consists of the two most important economic events in terms  of U.S. labor reports and the FOMC meeting. Reports from the U.S. labor department may show an increase in non-farm payrolls, along with jobs added  by private employers in October. This may put a break on rising unemployment rate. In other economic data releases, personal income and spending are also rising, though at lower pace. Factory orders and vehicle sales are also expected to witness an increase in their respective numbers. These data expectorations render some support to  the dollar but the Fed's QE measures may trigger some expected movements. Among other central banks, the Reserve Bank of India may also increase its policy rates by 25 basis points which will strengthen the rupee further. Bank of England and European Central Bank are expected to keep their benchmark interest rates unchanged at 0.50% and 1%, respectively. Investors are likely to hear their statements carefully to develop further insights on their respective economies.

The dollar stands dicey ahead of economic reports and the FOMC meeting. Gold may gain on expectations of further quantitative easing by the Fed and physical demand on festive season. CFTC reports also suggest that speculators covered their short positions more than they liquidated their long positions, which points to some
confidence building in the yellow metal. However, the demand was seen at lower levels ahead of festive season. Indian gold imports may have also risen as much as 40 tons in October month. Later during the week, payrolls data may take some profits away from the bullion. Gains in MCX gold may vary due to rupee effect.

Technical Analysis – Gold

Weekly chart of COMEX gold futures is showing no sign of trend reversal. It looks like a game of extended trend lines. In this week market took the support at $1327 of the extended long term Blue Green color up trend line (Trend line 1033.90 as on 21st march 2008, 1226.40 as on 4th Dec 2009) shown in the chart below. For the coming week it is expected to resist at $1380 of the extended long term Red color up trend line (Trend line 989.60 as on




Technical Analysis – Silver-  

Comex Silver Futures closed near to all time high at 24.70 this week. A Long white candle stick is spotted in the weekly chart of silver indicating bullishness. EMA -9 is at 21.786 and EMA – 18 is at 20.941 trading above all the short and medium term moving averages. The technical momentum indicator RSI (14) is at 0.72 that is an over bought mode and restricting to go for long. We suggest low risk traders to stay away from the market while high risk traders can go long with strict stop loss.

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