The beginning of 1999 has been bad for the yellow metal. A weak dollar and host of other factors which should have affected gold positively did very little for it. Although a hike in import duty pushed up the domestic gold prices, in the international market it touched a four-month low last Friday.A fall in prices further weakens the technical position of gold which point towards a fresh 19-year low. During the first week of this year, the yellow metal did try to stage a rally but failed to cross the short-term resistance level of $293.In fact, during the past two years only two attempts have been made for a rally. In the first quarter of last year, it rallied from an 18-year low of $278 to $314. But the lack of sustained buying at that level once again brought the prices back to $276.
From here, the yellow metal showed a rally again but failed to cross the April level of $314. The rally in October last year lasted till the level of $304. Thus, it posted a lower top which without any doubt was a negativesign. The latest fall directly points towards a further fall which can take the yellow metal to a fresh 19-year low.
For an uptrend, however, the metal needs to cross the $305 level first. And that appears very difficult at this stage.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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