Bullion

Gold advanced to a record and energy, metals and agricultural commodities rose as a weakening dollar sparked demand for alternative assets.

· MCX Gold Feb traded on a positive note and Wednesday and registered a hig of Rs. 11229 per 10 gram, closed with gains, similarly MCX Silver March followed the trend and registered a high of Rs. 20810 per kg also closed with gains.

· Gold, copper and nickel are off to the best start since at least 1980. Crude oil gained, after reaching a record $100 last week, and corn climbed to an 11-year high. The dollar fell on concern a housing slump and turmoil in credit markets may force the Federal Reserve to cut interest rates. U.S. Treasuries and equities also declined.

· China's gold futures advanced as much as 10 percent on the first day of trading as the world price of the metal climbed to a record on a weak dollar and concern rising energy and food costs will spur inflation.

· ETFs enable investors to bet on price changes without having to trade futures or take delivery of commodities. The global gold price gained 31 percent in 2007 on a declining dollar and concern the U.S. would cut interest rates to avert a slowdown. Gold has more than tripled since 2000.

· Militancy inNigeria does not pose a serious threat to oil supply at the moment and the country's output is actually returning to normalcy, a Nigerian OPEC official told

· The World Gold Council [WGC] is considering listing a gold exchange traded fund inDubai to tap into booming investment demand in theMiddle East, a WGC executive said Wednesday.

Indian Bullion Spot Market

Gold and Silver prices soared in spot markets driven by the rally in international markets. There was fund buying in the precious metals complex amidst concerns over the state of affairs of theUS economy.

MCX Gold Feb (Daily Chart)



Technical Outlook:

Momentum studies are still bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations: MCX Gold Feb: Sell at 11140-11150 for the target of 11080 and 11000 with stop loss at 11175



MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies are still bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations: MCX Silver March: sell at 20380-400 for the target of 20200 and 20060 with stop loss at 20510

MCXARUN
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