abhishekrespons...'s  Instablog

Gold futures were lower in European trade on Friday, as Greek political progress and a stronger greenback dampened demand for the precious metal

On the Comex division of the New York Mercantile Exchange, Gold futures for June delivery traded at USD1582.55 a troy ounce falling 0.81%.

It earlier traded at a session low USD1573.75 a troy ounce. Gold was likely to find support at USD1573.75 and resistance at USD1642.95.

The political chaos in Greece is raising concerns regarding the future of Greece in the euro area. Yesterday, Alexis Tsipras, the head of Syriza, who has pledged to renegotiate aid terms for Greece, said he failed to form a coalition Greek government, thus giving the turn to Evangelos Venizelos, leader of Pasok, to form a government. Hence, another election may be inevitable by mid-June if political parties failed to form a government.

As expected Spot Gold prices witnessed selling interest at levels of $1602 on Thursday. Weakness could extend towards $1564 levels. Gains for the day could remain limited to $1595 levels.

· Silver is in a strong bearish trend and is expected to trade sideways to lower towards $28.40 followed by $27.80 levels. Gains if any could remain capped around $29.00(54450) levels.

· Risk markets across the roll are trading in the red through the Asian and early European session as China continues to remain a laggard. The country's April Industrial production rose just 9.3% on the year from 11.9% on the year growth in March and below average trade expectations of a 12.2% growth.

· Gold found reprieve in Thursday's trading, after three consecutive days of decline as the European currency union's rescue fund gave Greece a tranche of financial support as planned

· The European Economic Forecast published Friday revealed rosy estimates on budget deficits for the EU. Despite hardships imposed by a slowing global economy, the EU expects all countries in the region to narrow their budget deficits in the percentage of GDP in 2012, with the exception of Lithuania and Estonia. Trade may take these estimates with a pinch of salt and will look for confirmation on the same from economic data releases.

· During US hours, the April PPI and the Univ of Michigan Confidence Index is due for release. Overall, given the weak data out of China, the strength in the US index and the uncertain political and economic climate in EU zone, we expect gold to remain a sell and look for a test of $1564-$1530 levels.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.