DAILY GOLD TREND FOR 017 DEC 2010

Gold futures extended their losses to a second day Thursday,
a setback chalked up to year-end profit-taking,
 a higher dollar and some uneasiness about proposed
 position limits from the U.S. commodities regulator.

“With the end of the year coming up, individual and institutional
investors are attempting to book profits and take advantage
of another great year for gold,” said David Beahm,
vice president at Blanchard & Co., in New Orleans.

But a climb in the U.S. dollar for part of the session,
coupled with worries about newly proposed commodity-position
limits, also may have given some investors an excuse to sell.

“The other thing hurting gold is the strength of the dollar.
There’s still a lot of concern about Europe,” said Frank Lesh,
broker and futures analyst with Futurepath Trading in Chicago.

On Thursday, the Commodity Futures Trading Commission
proposed restricting the number of commodity futures and
option contracts that any investor can hold in energy, agriculture
or metals derivatives. Read more on CFTC’s

"Overall, economic uncertainties are gold-positive with the
currency markets still jittery while fiat currency yields are set to
 remain low for a prolonged period of time," said
VTB Capital analyst Andrey Kryuchenkov.

"Safe haven buying will limit the downside on gold in the short run."
While gold typically moves in the same direction as the euro
 in the short term, jitters over the stability of the euro zone
have helped lift the metal this year.

Holdings of the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Trust,
eased by another 0.6 tones on Wednesday, bringing their
total outflows in December to date to 0.4 tones versus inflows
 of just over 7 tones in the same period of 2009

I belive that a close above $ 1382  before this week
give a positive direction to gold.

MY COUNTS FOR 17/12 FOR FEB GOLD

RESISTENCE # 2 ........................... $ 1398.50(MCX Rs 20734)
RESISTENCE # 1............................ $ 1384.00(MCX Rs 20602)
PIVOT ............................................ $ 1372.50(MCX Rs 20496)
SUPPORT # 1................................. $ 1359.00(MCX Rs 20364)
SUPPORT # 2................................. $ 1349.00(MCX Rs 20238)

RECOMMENDATION : KEEP BUY ABOVE $ 1375 OR 20510 FOR INTRADAY ONLY

RAHUL KUMAR
GOLD Analysist

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