Mr. Vivek Gupta - Director Research - CapitalVia Global Research Limited
Gold was little changed early in Asian trading on Friday but looked likely to fall as concerns grew over weak physical demand and discovery of $15 billion of loans tied to falsified gold deals in top consumer China. Chinese gold processing firms have since 2012 used falsified gold transactions to borrow 94.4 billion yuan ($15.2 billion) from banks. Comments from a U.S. Federal Reserve official that raising interest rates by the end of the first quarter in 2015 will be appropriate also pressured investor sentiments. Data also showed that China's gold imports from Hong Kong dropped in May to the lowest level since January last year as a weaker yuan curbed appetite. We expect Gold prices to remain up for the week over ongoing tensions in Iraq and Ukraine along with softer dollar internationally.
Over all, MCX Gold August future is in consolidation and sustaining below the level of 27900.So for the coming week, we are expecting good selling from the higher levels. For the coming week 27450/27000 will act as a major support whereas 27900/28300 will act as a major resistance level in MCX Gold August future. For the next week in MCX Gold, trader can use sell on higher level strategy, if MCX Gold August future sustains below the levels of 27800 then it could test the levels 27200/27000.