India gold weakens on firm dollar index

Spot Gold settled 1.17% lower than the previous closing at $1545.35. But futures in the COMEX have recovered to tick new high of $1577.40 to settle 0.04% up from the prior, at $1557.10.
However, in the MCX division the same has been closed by 0.85% lower than the previous.
Dollar Index rose after a huge fall against basket of six major currencies, extending a rebound from the lowest level since August 2008
Global equities performed at mix .The Asian equities closed mostly negative while DJIA also slid a bit. FTSE was closed yesterday, and Germany gained 0.18%
The US construction spending has increased on the back of rebounding housing sector and the ISM manufacturing number has also improved
Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded slid a bit to 1229.64 tons from 1230.24 tons as on 29th Apr
The gold-silver ratio improved a bit to 33.78 from 32.02 as gold has gained margin over silver
Outlook:

At the Globex platform Gold is seen trading $1541.20, down by $15.90 from the previous closing. The dollar index at the moment is showing some strength over the majors and the Asian equities are trading almost at a negative.
The dollar got a boost after Osama Bin Laden died, may reduce the appeal of precious metals. The central bank has signaled the possibility of increasing the REPO rate by 25 basis points today as India’s inflation risks have amplified to 8.98% in March, exceeding the estimate because of higher commodities prices, which may appreciate the rupee. So, upside of the metal’s price may be restricted. Coming to the economic data front, the Euro zone PPI is likely to ease while the US factory orders may get a boost, which may put some pressure on the metal.
Overall, gold is likely to trade at a down side today on the back of a stronger dollar index and a likely favorable data expectation from the US. Hence it is recommended to be long at lower prices.
Courtesy: Karvy Commtrade Ltd.

(Source: http://www.commodityonline.com/futures-trading/technical/India-gold-weakens-on-firm-dollar-index-23527.html)