One may not like it; what is bad for US economy is good for Gold

Last Updated : 18 October 2012 at 12:35 IST

AHMEDABAD (Commodity Online): Gold and silver prices are looking positive for the day even as evening awaits a jobless claim report from the US. The figures are expected to boost gold prices.

The weekly data, known as initial jobless claims records the number of people who filed for insurance for the first time as jobs were snatched away from them by a down trend in the economy.

On October 11, the claims stood at 339000 against a forecast of 370000. This time around, the figure is supposed to reach 365000. A higher than expected figure is deemed bullish for gold as the same may prove to be bearish for dollar as both are inversely related.

Invariably, it has to be noted with pain that what is bad for US economy is good for gold. In fact, many job seekers out of classic case of exasperation may refrain from filing for insurance as they even consider putting a full stop to job search; unfortunate, one may say. This, however indicates the proverbial tip-of-the-iceberg situation. The jobless claims data is thus only an indication of the rot in the  economy. 

But given the earnings season signals, one may not completely rule out the possibility of a surprise and sharp fall in jobdata; if not for the week, then at least for the coming weeks as bright earnings may take time to reflect in economy as a restore point of jobs. 

India Gold

“Depreciation in Indian rupee also support higher bullion prices for the day.” said Ankush Kumar Jain, Manager-Research (metals, energy) with Commodity Online.

“Gold is having good support at Rs.31040 and resistance at Rs.31240. Intraday traders may take a long position around Rs.31120 with stop loss of Rs.31040 for the target near Rs.31230.” he added.

“Technically on daily charts, silver is now having good support at Rs 60000 and Resistance at Rs 60800” he further said.

Intra-day traders are advised to take a long position in silver December contract around Rs.60400 with stop loss of Rs.60000 for the target near Rs.60800 and Rs.61200.

As published in: http://www.commodityonline.com/news/one-may-not-like-it;-what-is-bad-for-us-economy-is-good-for-gold-50934-3-50935.html