BULLION

Gold traded weak on Friday and followed trend on Saturday; market remains weak on international trend, as dollar has shown some recovery.

· MCX Gold April traded in range of Rs. 11490-11680 and Silver March trade in range of Rs. 21735-22290 per kg following international spot gold and silver. International spot gold settled at $902.20 per Toz and silver settled at $17.04 per Toz with loss.

· Gold fell, capping the first weekly loss in four, on speculation a recession will slow demand for the precious metal and other commodities.

· U.S. stocks declined as reports showed confidence among U.S. consumers fell to a 16-year low and manufacturing in New York contracted this month for the first time in almost three years. Gold demand dropped 17 percent in the fourth quarter of 2007 as higher prices deterred purchases by jewelers and retail investors. Gold reached a record $942.20 on Jan. 30.

· Global demand dropped to 843 metric tons from 1,013.4 tons in the last three months of 2007, the London-based World Gold Council said Feb. 13 in its quarterly report. Buyers from India, the world's biggest user, reduced purchases by 64 percent to 83.9 tons. Jewelry use dropped 17 percent. About 68 percent of gold demand last year came from jewelers.

· The dollar has fallen to week-lows against the euro Friday as a rate cut at the Federal Reserve's March meeting is priced into the market. Benchmark crude oil futures continued on from Thursday's breakout on concerns over growing tension betweenVenezuela and theUS.

· Markets are once again tipping anotherUS rate cut in March, which should give gold some added momentum and may be enough to break it out of its recent consolidation pattern.

Indian Bullion Spot Market

Precious metals was a tad up in spot markets with support from a weak dollar, high crude oil prices and expectations of yet another interest rate cut by the Federal Reserve.

· In Mumbai markets, gold (995) rose by Rs 15 to finish at Rs 11,700gm and gold (.999) by Rs 20 to Rs 11,755/10g respectively. Arrivals in gold were at 100 kilos. Silver (.999) shot up by Rs 25 to close at Rs 21,645/kg. Arrivals in silver were at 150 kilos.

· Chennai gold (995) and gold (.999) was up by Rs 10 to finish at Rs 11,800/10gm and Rs 11,850/10gm respectively whereas Silver (.999) closed up by Rs 250 at Rs 21,400/kg.

· Jaipur gold standard rose by Rs 100 to close at Rs.11,800/10gm whereas Silver (.999) finished steady at Rs 21,800/kg.

· Ahmedabad gold (995) increased by Rs 35 to end at Rs 11,685/10gm and gold (.999) decreased by Rs 55 to end at Rs 11,735/10gm respectively whereas Silver (.999) shot up by Rs 200 to close at Rs 22,100/kg.

· In Delhi bullion markets, gold (995) closed unchanged at Rs.11,750/10gm and gold (.999) at Rs 11,810/10gm respectively whereas Silver (.999) declined by Rs 300 to end at Rs.21,400/kg.

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: Buy at 11510-520 for the target of 11640 and 11690 with stop loss at 11485



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 21900 for the target of 22100 and 22350 with stop loss at 21805

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