Bullion intraday

· Gold futures rose to a record $958.40 an ounce as a slumping dollar and soaring commodity costs boosted the appeal of the precious metal as an inflation hedge. Silver rose to the highest since 1980. April gold is trading at new contract highs, encouraged that today's poor economic news will help the Fed keep interest rates low. May copper is also trading at new contract highs.

· MCX Gold April rose to a high near Rs. 12171 per 10 gram and MCX Silver March touched the high near Rs. 23020 following international clues.

· International spot gold touched high near $ 954 and Silver registered days high near $18.06 following fund buy and weak dollar movement, rising crude oil prices also supported the movement.

· Gold has more than tripled in price during a seven-year rally. The metal surged 31 percent in 2007 as the Federal Reserve initiated a series of interest-rate cuts aimed at bolstering the economy, while inflation rose at the fastest pace since 1990. Fed policy makers intend to keep rates low ``for a time,'' minutes from their meetings showed yesterday.

· The federal-funds rate is at 3 percent, down from 5.25 percent in mid-September. Gold has gained 31 percent since Sept. 18, when the central bank started cutting borrowing costs. Interest-rate futures show a 92 percent chance the Fed will lower the benchmark rate to 2.5 percent by March 18, compared with a 70 percent chance a week ago.

· Last year, consumer prices rose 4.1 percent, the most since 1990. A dollar index, a measure against a weighted basket of the yen, euro and pound and three other major currencies, fell to 74.484 on Nov. 23, the lowest since the currency index started trading in 1973.

· Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, has risen 0.5 percent to 631 metric tons this year. It reached a record 653 metric tons on Jan. 14.

Indian Bullion Spot Market




Precious metals rose in spot markets as sentiments turned bullish following the gains in crude oil.

· In Mumbai markets, gold (995) rose by Rs 195 to finish at Rs 12,200 per 10 gm and gold (.999) by Rs 155 at Rs 12,255/10gm respectively. Arrivals in gold were at 200 kilos. Silver (.999) closed at Rs 22,555/kg, up by Rs 420. Arrivals in silver were at 350 kilos.

· Ahmedabad gold (995) edged higher by Rs 170 to end at Rs 12,180/10gm and gold (.999) by Rs 175 to end at Rs 12,235/10gm respectively whereas Silver (.999) closed at Rs 23,750/kg, up by Rs 1,600.

· In Delhi bullion markets, gold (995) elevated by Rs 170 to close at Rs 12,150/10gm and gold(.999) by Rs 180 to close at Rs 12,220/10gm respectively whereas Silver (.999) ends at Rs 22,300/kg, up by Rs 460.

MCX Gold Apr (Daily Chart)



Technical Outlook:

Momentum studies are 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 April: Sell at 12140-060 for the target of 12100 and 12000 with stop loss at 12184

MCX Silver Mar (Daily Chart)



Technical Outlook:

Momentum studies are 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: Buy at 22950 for the target of 22850 and 227500 with stop loss at 23190

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