Gold futures came out of last week's darkness, rising by nearly $30 an ounce buoyed by rally in the Asia equities and bargain buying. The metal hit a 2 year low of below $1330 last week attracting investors to buy the commodity.
Japanese shares soared Monday, leading Asian markets by a wide margin, with the yen tumbling as investors interpreted a statement from the Group of 20 major economies Friday as offering the international community's support for Tokyo's monetary stimulus.
Japan's Nikkei Stock Average% jumped 1.9%, getting a shot in the arm as the dollar rose back to just shy of the psychologically important 100-yen level. The G-20 leaders on Friday refrained from criticizing Japan for policies that weakened the yen and provided a competitive boost to its exporters.
Among the Chinese markets, the Hang Seng Index edged 0.1% higher in Hong Kong, while the Shanghai Composite lost 0.3% to give back some of the gains recorded last week despite steep losses for global commodity prices and some concerns about China's economic growth trajectory.
The move lower in Shanghai came as insurers dropped after a 7.0-magnitude earthquake in the Sichuan province, which killed at least 186 people and injured thousands, while some construction-related stocks advanced on hopes for reconstruction activity in the affected region.
Gold futures for June delivery are trading up $26 at $1422 per ounce on the Comex division of the New York Mercantile Exchange. It should find support at $1,322 levels and a resistance near $1430 levels.
Despite Friday's upbeat performance, gold futures lost 5.4% on the week, the fourth consecutive weekly decline. Prices of the precious metal are now down almost 26% since hitting an all-time high of $1,920.80 an ounce in September 2011, sparking fears that gold's bull run is coming to an end.
Sentiment on the precious metal has been bearish amid speculation the Federal Reserve could end its bond-buying program sooner-than-expected and following a sell recommendation from Goldman Sachs earlier in the month.
News that Cyprus was to sell some of its gold reserves to raise funds for its bailout also weighed on sentiment, as it sparked concerns other debt-ridden European governments would be forced to do the same.
In the week ahead, investors will be awaiting Friday's U.S. data on first quarter growth. Investors will be closely watching this data as they attempt to gauge the strength of the U.S. recovery. Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve.
MCX June gold futures may open today's session Rs 26300 levels with resistance near Rs 26500 levels. In the near term, it should hold on above Rs 25000 per 10 grams with resistance near Rs 27000-500 levels.
The festive season should also support the Indian gold prices in the physical markets. India celebrates Akshaya Tritiya, a key gold-buying festival, next month, while the wedding season will continue until early June. So far this month, the Indian gold prices have come down more than Rs 4000 per 10 grams and the silver prices have dived nearly Rs 10000 or 19% so far in the month of April.
Source by Commodity Insights
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