Commodity Trading Tips for Gold by KediaCommodity

Ajay Kumar Kedia 20 February 2014

Gold Gold settled down -0.64% at 30031 after the news that India is likely to cut the import tax on gold before end-February by between 2% and 4% from the current level of 10%, a senior government official said Wednesday. Gold settled down after minutes of the Federal Reserve's latest policy meeting showed several policymakers wanted to keep cutting monetary stimulus, weighing down on bullion's inflation hedge appeal. Minutes of the Fed's Jan. 28-29 policy meeting showed the officials wanted to drive home the idea that their asset-purchase program would be trimmed in predictable, $10-billion steps unless there was a big economic surprise this year. The precious metal accelerated losses after the Fed minutes, which also pressured U. S. equities. The strong inverse correlation between gold and equities earlier this year has shown signs of weakening lately. In January, the U. S. central bank opted to trim asset buying by another $10 billion to $65 billion a month. Earlier, gold fell after a Labor Department report showed little sign of inflation at the wholesale level. Separate economic data showing U. S. housing starts posted their biggest drop in almost three years also failed to lift gold. Gold gained 3 percent over three straight sessions from Thursday to Monday after last week's weak U. S. manufacturing output data. Uncertainty over growth in emerging markets also contributed to the metal's gains. Meanwhile SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.70 percent to 795.61 tonnes on Wednesday from 801.25 tonnes on Tuesday. Technically market is under long liquidation getting support at 29806 and below same could see a test of 29580 level, And resistance is now likely to be seen at 30204, a move above could see prices testing 30376.