Yellow metal shines bright

GOLD, has found favour once again with most investors leading to the price rising by nearly 4% during the week in the international market. In the Mumbai spot market, the price has risen to Rs 14,675 per 10gm from Rs 14,200 per 10 gm last week. The MCX gold contract expiring on April 4, closed the week at Rs 14,638 per 10 gm, from Rs 14,217. Through the week, it made a high of Rs 14,825.
    According to Subodh Gupta from Anand Rathi Commodities the announcement by the US government to bail out the banking system with a $2,000 billion package is expected to erode the currencies' values. This gives immense step-up to gold as far as investment demand is concerned, he indicated.
    "The influx of so much liquidity will further weaken people's faith in currencies," he said. Besides, there is a strong possibility that European Central Bank would cut interest rates that would bring down interest rates record low levels, he said.
    He expects that all these would help gold rise to $1,050 per ounce in the international market.
    As far as the Indian market is concerned, Si Kannan of Kotak Commodities believes that a weak rupee and the Indian physical demand that should pick up on price correction would avert any sharp falls. "One should hold gold," he said. Gold is also currently in the seasonal best quarter.
    According to Angel Commodities, this week market is expected to find very good support at Rs 14,420-14,440 levels. And strong support is seen at Rs 14,235-14,255 levels. "Trading below Rs 14,235 would lead to lower prices initially towards Rs 14,080 and then finally towards the major support at Rs 13,900," the report said.
    Resistance is observed in the range of Rs 14,730-14,750. And strong resistance is seen at Rs 15,000. Trading above Rs 15,000 would lead to higher prices finally towards Rs 15,370 for the coming week.