After the big decline in oil price, together with the strong rebound of the US dollar making it an attractive investment have speculators cuts their gold holdings and thus see gold drops to a 1 week low on Tuesday trade.
Asia's fourth largest gold investing country Thailand is now in a state of emergency and this prompts some buying from hedge funds. However, actual demand from jewelers for gold in other Asia countries are still low comparatively.
Commonwealth Bank of Australia's commodities strategist David Moore says that trend of oil and the US dollar has a negative effect on gold price.
A trader from Hong Kong says that as gold goes below 820 US dollars per ounce, there are some looks buy orders but the incident in Thailand did not have much influence. Oil price still remains the main factor affecting gold price.
Analyst says that from technical point of view, first level of support is at 808 US dollars, second level support is at 802 US dollars. Resistance is at around 823 US dollars.
Charts Say Gold Is Heading for $768
By CNBC.com | 02 Sep 2008 | 08:27 AM ET
After failing to hold an important support level, gold is on its way to below $800, according to a technical analyst.
After failing to hold a support level of $816, "$768 is the next downside target," Sandy Jadeja, chief market strategist at ODL Securities told "Squawk Box Europe" Tuesday.
Gold struck a two-week low of $805.20 an ounce on Tuesday after oil fell to its lowest in nearly five months and the dollar rallied to two-year high against the British pound and a seven-month high versus the euro.
The precious metal has lost more than 20 percent in value since spiking to all-time high of $1,030.80 in March, mainly driven by profit taking, oil's falls from record highs and a rebounding dollar, Reuters reported.
© 2008 CNBC.com
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