GENERAL MARKET CONDITIONS

Rise in London Inter bank Offered Rate (LIBOR) last week and a fall in energy and precious metals and gains in the US dollar once again reflects that in the short term global markets are nothing but driven by liquidity concerns. The big question in every trader is whether the Fed will cut interest rates even after December or will pause once and then start the interest rate cuts. Interest rate factor will dictate the markets in the first fortnight of December. In the first quarter of 2008 central bankers of G7 nations will have to fight inflation lower base effect. Crude oil had fallen to $50 a barrel in January this year. Lower base effect will result in higher inflation. Gains in crude oil prices have been greater than currency gains; therefore almost the central banks will have to choose between growth and inflation on their interest rate policy in the first quarter of 2008.

Gold and silver and other precious metals and base metals will be volatile as there are a number of central bank meetings till early next week. It will all depend on the future interest rate outlook of these central banks. Gold, crude oil and silver are medium term bullish and short term bearish, only if they are able to overcome short term resistances that there could be a short term technical breakout.

SILVER -- MARCH FUTURE

Silver has to hold $1376 and a daily close below the same will result in $1325. On the higher side only a break $1474 will result in short term bullish zone.

NYMEX CRUDE OIL -- FUTURE

Crude oil has to hold $86.32 to prevent a fall to $82. On the higher side only a break $92 will result in further gains.