Daily Wealth – Gold remains in downtrend

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Dear Investor

You are receiving Free Daily Update service called Daily Wealth. It will include technical updates on SPOT NIFTY, Stocks from NIFTY 50, USD/INR, GOLD, SILVER and CRUDE.

Calls given to Subscribers would not be part of this service.

Sesa Goa shows very good pattern. Buy Sesa Goa at current level for target price of 182-190.

NIFTY

NIfty has been moving in the range of 5640-5730 since last 30 days except 2-3 spikes up or down. Unless, it breaks on either side, it is difficult to bet on either side. I think patience will pay in this time. Wait for closing above or below range to initiate fresh trend.

Yesterday’s Update:

NIFTY HAS YET TO PASS 5730 TEST

Nifty found support and climbed up. But, strength is still dubious. It closed almost where it opened. Hence, I will wait till it closes above 5730 to initiate fresh long positions.

Fundamentally Sound and Technically positive stocks: Sintex, Crompton greaves, Educomp, Force Motors, NMDC, TCI ( Transport Corporation of India ), Tecpro systems. I will keep revisiting this list.

USDINR

I think, It was wrong to estimate that Rupee will shoe resilience. Rupee has closed above the range. Yes, I will wait for one more day to see that Rupee sustains above 54.50. But, if sustains then 55.60 and 55.90 will be next target.

GOLD

Nothing to update fresh as Gold is behaving as expected and still remains in downtrend. IF Gold finds support around 1674-1680 levels then may retrace some of the fall.

Why Gold Fell?

Gold was trading in range and had been in range since mid of September. GDP and Jobs data of US were on improvement since then. The sudden improvement of Jobs data was catalyst for Gold’s sudden fall.

Market participants and traders believed that if Jobs data improves and GDP continues to improve as it improved in last quarter above expectation, then US will stabilise, Govt’s revenue will increase and issuance of Fed T-bill will reduce and hence Dollar will go up. When Dollar goes up, inflationary expectations come down and hence God should fall !!

But, this is mere daydream. Gold is far from being topped out. I expect this downturn to continue for some time and may be till Jan, 2013. But, rest assured, US will fall further before sustainable recovery and Fed will continue to print as it has been doing since last 4 years and dollar too will continue to slip down. This is temporary downturn.

The sad thing is, this sharp downturn will shake Gold holders from within and most of them will abandon their positions. Stay tune to my updates.

Update for 5th Nov.

I had objectively warned on 1st Nov that do not create fresh long untill Gold closes above $1775. Gold dropped $ 40 on 2nd Nov. If Gold does not find support in the lower range of 2nd Nov that is $1674 to $ 1680 on Monday and closes below $ 1674, Gold will come down to 1620 and may be further down to find support around $ 1550. Hence be cautious. Those, who are on sidelines can use the opportunity to short gold on higher levels.

In Indian price, Gold has first support range 29000-29400. On further slippage, Gold will find support around 27500. I will wait for Gold to close below 30380(Dec Contract) to build short position.

If Rupee slips further below 54.20, Gold will fall less than expected.

SILVER

Silver will continue to follow Gold.

CRUDE

I will remain sideways. Will update as opportunity arises.

Note:

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Regards

Dhaval Shah

Blog: https://investmentacademy.wordpress.com/

Disclaimer: Daily Wealth is a free daily investment newsletter published by Investment Academy. This publication does not provide individual, customized investment or trading advice. All information is based upon data whose accuracy is deemed reliable, but not guaranteed. Performance returns cited are derived from our best estimates, but hypothetical as we do not track actual prices of customer purchases and sales. Author might have open positions in the stocks and Indices recommended above.

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