GENERAL MARKET CONDITIONS

Yesterday was one of the few days in which volatility was limited. In fact day traders have got so used to the high volatility in metals that they were surprised at low volatility yesterday. Gold for the first time in many weeks traded in less than a $10 range. Silver and copper were not volatile as they traded in a one way upward direction. The Fed, European central bank and others have been adding liquidity over the past few weeks. The trickle down effect takes time which will support precious metals and base metals soon.

There is a lack of major market moving news and it will be technical trade. Some of the traders will be preparing to go for holidays from next week. This could result in position squaring and rebuilding. Options expiry will also be the key. Volatility should increase.

Copper and other base metals have recovered and if they are able to hold on to current prices into next week, we expect further gains in all base metals. However investors still suspect yesterday’s gains and will invest only if it confirms that the rise in base metals is here to stay.

GOLD -- FEBRURAY FUTURE

Gold will trade in wider $790-$812 range for the day. A breakout is in the offing from the current trading range soon. For the rest of the year as long as gold holds $790 downside will be limited.

COPPER -- MARCH FUTURE

Copper has managed to hold key long term support at $277 and should target $307. Intra day support at $292. Only a consolidated break of $307 will result in $317.0