Bullion touched US$1669 an ounce yesterday before closing, with a drop of 3.54%, at US$1594 an

Bullion touched US$1669 an ounce yesterday before closing, with a drop of 3.54%, at US$1594 an
ounce. It reached US$1669 an ounce as Euro debt resolution became more and more doubtful.
Investors also took advantage of low prices indulging in short selling, which resulted in fluctuating
price levels.
The main demand for the metal that is causing its prices to increase is from India and China who
have always been the largest and second largest consumers of gold. Moreover, the peak season for
gold has already started in September with Eid and will continue in October and onwards owing to
Diwali and weddings which will further boost the metal’s consumption.
However, global recession threat including expected deceleration in China’s growth, falling demand of
US consumer goods etc is causing all commodities to fall, and is also spilling its effects on gold. Plus the
strengthening of dollar has also resulted in the precious metal losing its appeal as an investment
haven.
The metal has touched US$1583 an ounce today breaking the support level of US$1588 an ounce. Thus
it is possible that it dips to US$1533 an ounce once again. This period is for investors to perform short
selling; buying at around US$1587‐US$1600 and selling as it reaches US$1644‐US$1650 an ounce.
Using Fibonacci Retracements we have estimated the following resistance levels for gold:
R1=US$1651; R2=US$1714; R3=US$1793
Analyst:
Ms. Gulshan D
Ferozepurwalla*
gulshan@scstrade.com
+92‐21‐111 111 721
September 29, 2011
Pakistan Research
Commodities Daily
MARKET WATCH
(Prices as on September 28,
2011)
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