Bullion

Major Headline:

Gold recouped all the earlier losses of the session to close with significant gains as dollar eased after initial firmness, firmness in crude oil prices however supported the gains. Gold rose the most in a week on speculation that energy and food costs will accelerate, boosting the appeal of the metal as a hedge against inflation. Silver also gained.

Crude oil, heating oil and natural gas all rose today, after wheat and rice reached records yesterday. Some investors buy gold to hedge against rising consumer prices. Before today, gold gained 25 percent this year, while the UBS Bloomberg Constant Maturity Commodity Index climbed 19 percent.

Corn traded near a nine-month high and soybeans near the highest in 34 years on speculation that U.S. demand for fuel made from grain and oilseeds will surge. Wheat rose above $10 a bushel yesterday for the first time. Some investors buy gold, which fell in the past three days, to hedge against rising consumer prices.

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Sell at 10330-350 for the target of 10240 and 10140 with stop loss at 10400

MCX Silver
Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Silver March: Sell at 18880-930 for the target of 18650 and 18450 with stop loss at 19070