28 Nov Thursday View

Gold closed lower yesterday at USD 1236 with a lower high tested at USD 1254. A potential bullish reversal signal of a hammer we discussed about after close on Monday now seems to be ineffective after consecutive lower closes. For now an immediate resistance is sitting at around USD 1260 level and support at USD 1225. With holidays nearing we are expecting thin volumes with either pretty much flat price movements or unexpected unreasonable swings.

An update from Reuters -

Activity is relatively thin, as U.S. financial markets will be shut on Thursday for the Thanksgiving holiday.

"The story of gold remains pretty much the same… and the drivers for now remain the dollar and the U.S. data," VTB Capital Andrey Kryuchenkov said.

On the downside, support stands at USD 1220, and then the longer-term level would be USD 1200, Kryuchenkov added.

U.S. jobless claims unexpectedly fell last week and the November Thomson Reuters/ University of Michigan consumer confidence improved from a preliminary reading. The Chicago PMI held up better than expected last month after surging in October.

However, a soft October durable goods report was the only dent to an otherwise upbeat set of figures.

As a gauge of investor sentiment, holdings in SPDR Gold Trust, the world's largest gold-backed exchange- traded fund, fell 5.7 tonnes to 843.21 tonnes on Wednesday to their lowest since early 2009.

The fund has seen outflows of more than 450 tonnes this year as investors put more money into rallying equities. The outflows from ETFs have been a big factor in gold prices dropping more than 25 percent in 2013.

CHINESE BUYING STRONG

China, which is expected to overtake India as the biggest consumer of the metal this year, has seen a pick-up in demand this week due to lower prices.

Traded Volumes of 99.99 percent purity gold on the Shanghai Gold Exchange hit 18.3 tonnes on Thursday, their highest since Oct. 8, according to Reuters data.

China net gold imports from Hong Kong climbed to their second highest on record in October as it bought more than 100 tonnes of gold for a sixth straight month to meet unprecedented demand.

Trade Happy, Trade Safe :)