Gold recovers but pressured by outflows from ETFs
In India, gold prices have recovered to 25500 per 10 grams after having fallen to 24750 last week amidst increased demand for jewelleries and gold coins on falling prices in the wedding season which will run from April to June.
Gold prices have gained on Monday showing recovery from a sharp fall recently but concerns about outflow from exchange traded funds persist despite some brisk buying seen in India, the largest consumer of gold in the world.
In electronic trading, Comex Gold June has risen to $1421.2/Oz gaining $25.6 on Monday trade. " On daily charts,gold is showing an ascending triangel formation after a sharp fall and although recovery is not that sharp," according to Sreekumar Raghavan, Chief Strategist at Commodity Online Group.
Near term support levels are seen at $1370, $1350 while resistance is seen at $1475, 1560 levels but RSI at 32.31 is above oversold positions and moving to neutral territory, he added.
Net ETP redemptions have reached 117 tonnes for the month to date, already surpassing February as the weakest month on record. Outflows have reached 277 tonnes for the year-to-date, which is almost equivalent to inflows in 2012 at 279 tonnes. At current price levels, 270 tonnes of gold holdings are cash negative, and in our view, continue to pose the largest downside risk to prices in the near term. Although net redemptions have not hit a daily record high (32 tonnes in January 2011), they have not shown any real signs of slowing down either, according to a weekly review by Barclays Research.�
Gold posted its biggest-ever daily loss in dollar terms last Monday, shocking veteran investors, who see gold as portfolio protection against inflation and other market risks. Prices sank to around $1,321 on April 16, its lowest in more than 2 years.
In India, gold prices have recovered to 25500 per 10 grams after having fallen to 24750 last week amidst increased demand for jewelleries and gold coins on falling prices in the wedding season which will run from April to June.
At India's Multi Commodity Exchange (MCX), gold for June delivery has risen 0.94% to Rs 26293 10 grams on Monday trading. Technically, MCX gold remains weak with an RSI of 26.22 and MACD still in negative. However, on charts recovery trends are visible which can push prices to Rs 28,000 levels in the short to medium run, Sreekumar Raghavan added.
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