Bullion

Major Headline:

· Gold rose in London/Comex/MCX on speculation investors will add to holdings of the metal to take advantage of a 5 percent drop from a record last week. Platinum climbed to an all-time high.

· MCX Gold April traded above Rs. 11540 per 10 gram with net gain of almost 1.20% similarly MCx Silver March rose to a high above 21395 with almost 1% gain.

· International Spot gold traded above $ 908 and Silver traded above $16.64

· Assets in the StreetTracks Gold Trust, the biggest fund backed by gold, have held at 631 metric tons this month even as prices peaked at a record $936.92 an ounce on Feb. 1. Gold today snapped its biggest four-day decline in two months.

· The Federal Reserve has reduced its benchmark interest rate twice this year even after U.S. inflation last year rose the most in 17 years. Prices paid by consumers have been rising faster than the 3 percent deposit rates in the U.S., giving savers a negative real rate of return. Costs are also rising from the U.K. to Italy, Singapore and China.

· Some Asian buyers took advantage of gold's lower prices; boosting prices back to around USD892/oz. However, reluctance to maintain long positions over the long Lunar New Year holiday weekend capped buying interest, traders said.

· The market remains heavily long, leaving prices vulnerable to a retreat in the short-term, they said, while overall sentiment remains bullish.

· Very weak US non-manufacturing data following close on last week's poor payrolls numbers may indicate that the US is already in a recession, which will pressure stock markets lower and drag gold with it, said Westpac Bank Chief Currency Strategist Robert Rennie.



Indian Bullion Spot Market

Spot precious metals finished with mild gains tracing the trends in international markets. In international markets gold eyed the USD 900 level on bargain hunting. Gold was buoyed by concerns of yet another interest rate cut by the Federal Reserve amidst background of a dampening US economy.

· In Mumbai markets, gold (995) jumped up by Rs 65 to finish at Rs 11,470/10gm and gold (.999) by Rs 70 to finish at Rs 11,525/10g. Arrivals in gold were at 100 kilos and traded volumes at 100 kilos. Silver (.999) was down by Rs 10 to close at Rs.21,005/kg.

· Chennai gold (995) decreased by Rs 50 to finish at Rs 11,550/10gm and gold (.999) by Rs 150 to close at Rs 11,600/10gm respectively whereas Silver (.999) declined by Rs 100 to close at Rs 20,500/kg.

· Jaipur gold standard closed steady at Rs.11,600/10gm whereas Silver (.999) rose by Rs 600 at Rs 21,000/kg.

· Ahmedabad gold (995) and gold (.999) rose by Rs 80 to close at Rs 11,480/10gm and Rs 11,530/10gm respectively whereas Silver (.999) was down by Rs 100 to close at Rs 21,000/kg.

· In Delhi bullion markets, gold (995) rose by Rs 15 to close at Rs.11,540/10gm and gold (.999) by Rs 25 to Rs 11,600/10gm respectively whereas Silver (.999) ends Rs.20,600/kg, down by Rs 50.


Technical Outlook:

Momentum studies are bearish but are not looking at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 at 11460-70 fro the target of 11590 and 11660 with stop loss at 11415



MCX Silver Mar

Technical Outlook:

Momentum studies are bearish but are not looking at oversold levels and will tend to support reversal action if it occurs. The daily stochastics moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Silver March: Buy at 21280-300 for the target of 21550 and 21750 with stop loss at 21120

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