Gold prices flirted with the 1300.0 level yet gain on Tuesday but buying interest waned into the close with the front month June contract settling at 1294.1. In fact it looked like Gold was set to turn over amid heavy profit taking as heavy fund selling dominated morning trading with one fund liquidating 22K contracts this morning. However a weaker Dollar and lower stock prices halted the sell-off as it was reported that Goldman Sachs announced that they were potentially liquidating their long dollar position. Weaker earnings results did in stock indexes throughout the session and the combination of a weaker Dollar and lower equities buoyed gold above 1290 for the remainder of the session. Geo-political worries most notably with North Korea subsided some Tuesday but the nuclear threats from the rogue nation remain in traders minds from all the saber rattling from late last week and over this past holiday weekend. Future physical demand received a recent boost from comments from Indian officials that the world’s number one buyer may reduce their import duty on gold purchases from 10 percent to 6 percent soon and could even lower it down to 2 percent within two years. If enacted the move by the Indian Government could raise import demand there. Coming into this week non commercial and non reportable funds came into this week long 192K gold contracts while coming into this week long 116,469 contracts for Silver which is a record long.
Technical levels for the remainder of the week come in as follows. Support is down at 1275.8 and below there at 1260.9. Resistance is up at 1303.8 and then up at 1318.3 basis June futures.