DAILY GOLD TREND FOR 16 DEC 2010

Gold futures fell Wednesday, pressured by data showing
 low U.S. inflation and by a jump in the dollar after
 stronger manufacturing reports and rising bond
yields made the currency more attractive.

Price action in both gold and silver is indicative of the
beginnings of holiday trade as players begin squaring
 books ahead of the year’s end and move to the sidelines
in anticipation of taking some time off. Potential exists for
 some rather strange moves in price. Try not to read too
 much into it as both longs and shorts exit the market only
to return at the start of the New Year’s first full trading week..
"There wasn't aggressive safe-haven buying to push
the market up. It's the end of the year and many books
are closed. People have had huge profits for the year
and they decided to book them now," said COMEX gold
options floor trader Jonathan Jossen

Technically, gold needs two consecutive closes above $1400 to
kick it up towards $1420. Downside support exists near the
$1375 level with bears hoping to break it down below there
and push it towards $1355 or so. Look for dip buyers to
 be active should that occur.

MY COUNTS FOR 16/12 FOR FEB GOLD

RESISTENCE #2.......................... $ 1404.00(MCX Rs 20770) 
RESISTENCE #1.......................... $ 1395.00(MCX Rs 20704)
PIVOT ......................................... $ 1389.00(MCX Rs 20647) 
SUPPORT # 1.............................. $ 1380.00(MCX Rs 20574)
SUPPORT # 2.............................. $ 1374.00(MCX Rs 20517)

RECOMMENDATION :  FIND A SUPPORT LEVEL TO BUY NEAR SUPPORT #2

RAHUL KUMAR
GOLD Analysist

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