Gold target of $865/oz in 2007 unscathed

History repeats itself! For the last three years in a row, bullion prices have corrected in December. So, why should it be any different this time? Last Friday, silver slipped Rs 1,220/kg, and gold declined Rs 179/10gms on the MCX.

As we said earlier, the market could correct anytime, but as the resistance of $648 (gold) was not broken, this was just a technical correction. This is very good for long-term bullishness as the target of $865 for the next year remains untouched.

The key short-term technical levels in both gold and silver have held well, and should hold for the remaining few sessions in 2006. We expect low volumes and further dip as the week progresses towards the year-end.

The market is now moving towards the neutral zone, and, moving ahead, dollar and crude oil price movement will be important for bullion. In the coming days, gold price may bounce back towards $627 as technically, at least, a pull back can't be ruled out.

Today, MCX bullion opened positive on account of a technical pullback, and trading on a steady note. While gold opened at Rs 9,092/10gms, silver opened at Rs 19,580/kg.