GENERAL MARKET CONDITIONS

Expect more investment demand in gold and silver after yesterday’s start to the first trading day of 2008. Yesterday’s rise was a bit of surprise. The common factor for the rise in commodities was switching away from US dollar denominated assets. US equities fell along with the US dollar. The cycle is simple, a weaker US dollar results in higher energy prices which is turn results in higher gold and other investments denominated in US dollars. Basically, it is all due the US dollar weakness. Another reason is that US and other central banks have created too much liquidity in the last quarter of 2007 to get over slower growth which is resulting in too much money chasing too few goods.

Crude oil and the US dollar will dictate metals. I am not a crude oil expert for what will be 2008's top price - that remains to be seen. Technically, traders will be apprehensive to go short before next week.

OLD -- FEBRURAY FUTURE -- INTRA DAY PIVOT:$852.0

As long as gold holds $848 it will target $887.80 and $897 in short term. A consolidated fall below $848 will result in $830 and $818.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $102.0

Crude oil targets $109.10 and $114.70 on a break of $102. On the lower side as long as $97.60 holds downside will be limited.

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