Outlook: MCX Gold

MCX Gold:

Spot gold  drifted  lower, pausing consolidations of  the last few days after the US Federal reserve dashed hopes of the forthcoming stimulus to boost up the abated economy. US Federal Reserve holds off offering more support to the economy, even though there was a strong rumor that the Fed will announce fresh bond buying program to take back the economy’s loosing momentum. Feeble economic
releases hurt the US economy with weaker than expected auto sales growth of 9 percent in July. However the dollar hit a one week high against a basket of currencies after the  Fed Reserve provided  little clues for fresh monetary easing. At the same time, investors are expecting more bold actions from the European Central Bank’s policy meeting today as their President pledged earlier that ECB will to
do everything within the bank’s mandate to hold the Euro zone together.The recent swing support of $1610 an ounce has cleared and prices are now attempting to break the key support of $1596 with volume.
After repeated failed attempts to break the upside blockage of $1630 prices, diffused fresh buying momentum and drifted lower. Day’s bias is likely to resume the selling pressure but possibly find support at $1580 and turn higher. As per the current chart formation, direct dip below  $1578 will be required confirming short term bottoming. On a very broad basis prices  are  required to break  $1640-1530 regions to suggest fresh directional moves, else it likely to trade inside the region with mild volumes. The correlation between gold and Euro still stays above 0.75 the highest level seen from the start of this year. RSI is in neutral while oscillators stay well above the zero line.