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20 Oct 2014
Gold gains capped by rising equities
FXStreet (Mumbai) - The rise in Gold prices has been capped by a rebound in the equity markets since last Thursday. Gold prices have been stuck around USD 1240/Oz levels, as the Asian markets gained strength today tracking the Friday’s sharp recovery on Wall Street.
Gold is trading flat around USD 1240 today, as the Asian equities inched higher. The Asx and the Nifty have gained 1% each, while the Shanghai composite is up by 0.56%. The Japanese equities have gained almost 4%, although analysts say much of the today’s move is a technical rebound. Meanwhile, the European equity futures are pointing to a weak opening.
Moreover, hopes of fresh stimulus from China have also helped re-store the risk-on sentiment in the markets. People’s Bank of China has indicated that it plans to extend around 200 billion Yuan in short-term loans to 20 large banks. Markets expect that such loans would help recover the demand from the world’s second largest economy.
Gold prices, though under pressure, shall remain supported as the demand from India is likely to stay high throughout the week on account of Diwali.
Gold technical levels
Gold has an immediate resistance of 1242, above which prices may test 1245 and 1250 levels. On the downside, the metal has a support of 1238.
Gold is trading flat around USD 1240 today, as the Asian equities inched higher. The Asx and the Nifty have gained 1% each, while the Shanghai composite is up by 0.56%. The Japanese equities have gained almost 4%, although analysts say much of the today’s move is a technical rebound. Meanwhile, the European equity futures are pointing to a weak opening.
Moreover, hopes of fresh stimulus from China have also helped re-store the risk-on sentiment in the markets. People’s Bank of China has indicated that it plans to extend around 200 billion Yuan in short-term loans to 20 large banks. Markets expect that such loans would help recover the demand from the world’s second largest economy.
Gold prices, though under pressure, shall remain supported as the demand from India is likely to stay high throughout the week on account of Diwali.
Gold technical levels
Gold has an immediate resistance of 1242, above which prices may test 1245 and 1250 levels. On the downside, the metal has a support of 1238.