Weekly Outlook 25 Mar - 29 Mar

Gold recovered further last week but the recovery is very slow, weak and still limited below 39000 resistance. As long as price is below this level, the short term outlook remains Bearish and any position opened or to be opened long should be very cautious. As viewed by many analysts the outlook will be changed once the price breaks and holds the 39200 level.

Currently, the price is around an important support level 38725 (78.6 %) Fib retracement. If for any reason this level fails to hold, the middle line of down trend channel should provide the price some support.

On upside, the immediate resistance is at 39000 level, break and hold of 39075 could lead to test of 39300 level and beyond.

If looked at COT data, combination of Managed Money and Other Reportables, Long position is 208895 in comparison to Short 73285 resulting Nett Long by 135610, Open Interest is 440712 somewhat lesser than the previous week.

Sentiment somewhat feels Bullish in immediate term, fundamentally, considering Cyprus problem still unresolved, and technically, there is still some room for Gold to move up ahead.

But we might as well consider these quotes from previous week news and all.

# "The appeal of Gold could return after a delay, as occurred in the immediate aftermath of the financial crisis in 2008. But should Gold fail to respond, it is running out of catalysts to drive prices higher," said Suki Cooper, precious metals strategist at Barclays Capital.

# Cyprus is scrambling to avoid a melt-down of its banking system and a possible exit from the Euro, facing a deadline from the European Union of Monday to raise 5.8 billion Euro to secure a 10 billion Euro international lifeline.

Happy Trading :)