Gold to edge lower on global economic concerns
Gold fell last week on mixed economic signals a stronger dollar and profit taking in the yellow metal. Gold traders continued to rebalance their portfolios after prices plunged by 5% its largest one day loss since De Gold fell last week on mixed economic signals a stronger dollar and profit taking in the yellow metal.
Gold traders continued to rebalance their portfolios after prices plunged by 5% its largest one day loss since Dec 08. Creating tension in the market the ISDA is considering triggering Greek credit default swap payouts due to collective action clauses. Despite ruling the ECB s exchange for Greek bonds for new securities exempt from private investor losses did not trigger the CDS payouts. Policy makers including former ECB President have spoken out against paying the swap contracts due to worries that traders would be encouraged to bet against failing nations thus worsen the euro zone crisis.
Supporting gold euro zone PPI climbed more than expected to a seasonally adjusted 0.7% last month from 0.2% the preceding month. The leaders agreed that given the Greek aid package being started and a potential euro zone recession its time to focus on a pro growth agenda despite the deficit control treaty signed today. German Chancellor changed her stance on slowing down payment for the EUR500 billion permanent rescue fund to speeding up the payments at the summit. Known as the EFSF the permanent fund will go into operation in July. Now technically market is trading in the range as RSI for 18 days is currently indicating 45.05 where as 50DMA is at 28,154.76 and gold is trading below the same and getting support at 280.06 and below could see a test of 27,988 level And resistance is now likely to be seen at 28,035 a move above could see prices testing 280.46.