Bullion

Gold rose to record highs in London, Comex and MCX as power cuts continued in South Africa, affecting the mine production in the world's second-biggest miner of the metal. Silver jumped to the highest since 1980.

· MCX Gold April traded towards the high of Rs. 11861 per 10 grams gave a small intra day correction towards days low of Rs. 11721 per 10 grams, but finally closed with gains. Similarly MCX Silver March registered days high at Rs. 21599 per kg and corrected towards days low of Rs. 21254 closed with gains.

· International spot gold traded positive to register day’s high at $933.10 per toz and silver at $16.82 per toz.

· Anglo Platinum Ltd. and Gold Fields Ltd. shut operations in South Africa for a fifth day because of a shortfall in power supply. The country produces more than a 10th of the world's gold and over three-quarters of its platinum. Gold also climbed on speculation the Federal Reserve will cut interest rates tomorrow, pushing the dollar lower and boosting gold's appeal as an alternative to U.S. assets.

· Interest-rate futures indicate a 74 percent chance the Fed will reduce its benchmark interest rate to 3 percent, compared with 86 percent yesterday, after a report showed orders for durable goods rose last month. The Fed last week cut the rate to 3.5 percent in an emergency move to head off a recession.

· Gold production inIndia in the first nine months of this financial year totalled 9.369 tons, up from 9.058 tons from a year earlier, according to the latest government data.

· Apparent long liquidation pared the fund's net long position in Comex gold futures and options combined as of Tuesday, according to the latest CFTC data. The large non-commercial accounts were net long 217,961, down from 224,528 the prior period.

Indian Bullion Spot Market

Precious metals received a lift in spot markets on upbeat equity markets, supply disruptions at South African mines due to power failure as well as expectations of yet another interest rate cut by the Federal Reserve.

· In Mumbai markets, gold (995) and gold (999) advanced by Rs135 to finish at Rs11,845/10gm and Rs.11,895/10g. Arrivals in gold were at 150 kilos. Silver (.999) closed at Rs.20,880/kg, rising by Rs.200. Arrivals were in silver were at 50 kilos.

· Chennai gold (995) escalated by Rs175 to finish at Rs11,875/10gm and gold (999) by Rs125 to close at Rs11,925/10gm respectively whereas Silver (.999) closed at Rs20,750/kg, rising by Rs300.

· Jaipur gold standard closed at Rs.12,000/10gm, advancing by Rs.200 whereas Silver (.999) closed at Rs21,000/kg, rising by Rs100.

· Ahmedabad gold (995) rose by Rs150 to close at Rs.11,850/10gm and gold (999) by Rs150 to close at Rs11,900/10gm whereas Silver (.999) escalated by Rs250 to close at Rs21,150/kg.

· In Delhi bullion markets, gold (995) increased by Rs80 to close at Rs.11,830/10gm and gold (999) by Rs90 to close at Rs.11,890/10gm whereas Silver (.999) zoomed up by Rs210 to end at Rs.20,750/kg.

MCX Gold Apr (Daily Chart)



Technical Outlook:

Momentum studies are bullish now 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 April: Buy only above 11760-750 for the target of 11890 and 11940 with stop loss at 11715

MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies are still bullish now 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: Buy at 21380-400 for the target of 21560 and 21670 with stop loss at 21180


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