Gold continues rally since 3rdFeb as U.S. economic indicators continue to show below expected results. The metal gained by 0.41% to $1272.49 as buying from china has gained momentum and U.S. payroll data arrived below expectation.
The metal has gained by 7.5% this year after losing 28% in previous year. It seems that yet the time has not come to shift fund from commodity market to equity market. Metal prices have got poor start this year but yet they have not bottomed out.
Tomorrow the new chair person of Fed, Jenet Yellen, will testify on the Semi-annual Monetary Policy Report before the House Financial Services Committee. Traders may try to deduce important clues to get idea on next policy move. It is not expected to bring high volatility in the market but comments of Fed chairwoman on tapering plan change the trade direction.
During the week ahead there are Retail Sales, Core Retail Sales and Consumer Sentiments data. According to forecast Retail Sales and Core Retail Sales are expected to fall while Sentiments may remain near to previous level.
Negative indications likely to make traders bearish on dollar and bullish on precious metals. Dollar has weakened compare to six major currencies and fell to 80.72 from the high of 81.31 (31st Jan) Further fall could reduce chances of tapering in near time and decline money flow to U.S. We may not see high fall in Gold in near time but the metal may find resistance near to $1280.