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Bye Bye Gold & Waiting for US Dollar’s U-Turn in New Year – Dec 31

December 31, 2013
Today is the last trading day of the year and we could be heading for choppy day. JPY is holding below 105, 10-year US bond yield failed to surpass 3 pct levels. Whereas, major stocks are set to close at record high, though Asia has so far made a good beginning, but market remains unsure about the closing trend.
The real test for the financial market will come in new year, when FED will gradually start reducing its bond purchase amount by $ 10 billion on monthly basis. Initial tone for Euro and Pound Sterling looks strong and we could see more gains. Whereas, gold will continue to loose its sheen.
Trading activity on the last day of the year (Today) is expected to remain thin and volatile too, as momentum should start picking up from next week, when traders will be back from holidays. So watch out for possible exaggerated moves. However, US consumer confidence data, Chicago PMI & Case Shiller Home Price Index may set the tone for new year.
GMT 2:44 – GOLD @ $ 1198 = Gold trend certainly does not bode well for coming year and is surely going to take pounding, as it is too far away from safe level of $ 1225-30 close. I will not be surprised if gold makes an upside feeble attempt, but a close below or around $ 1170-75 today will certainly ring alarm bell for 2014.
During the day in all 3-sessions, support is around $ 1188-90 and break of $ 1205 is required to test $ 1210.

GMT 2:49 – EURO @ 1.3795 = Support 1.3760-70 should hold for a possible move towards 1.3840-50 zones before easing or else 1.3725.
GMT 2:54 – GBP @ 1.6482 = Strong support around 1.6450-60 may hold Pound, with minor support around 1.6435 for another test of 1.6495-00, if breaks could stretch by another 25-30 pips, but break below would risk for a test of 1.6410-20 zones.
GMT 2:57 – JPY @ 104.90 = gains could extend but needs to break 104.70-75 levels for 104.50 or else re-test of 105.20-25 zones could be a possibility.
GMT 3:00 – AUD @ 0.8922 = Correction is taking place against all odds that could stretch up to 0.8950-60 zones if 0.8935 breaks. However. break of support level of 0.8905 would risk for another test of 0.8875-80 zones.

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