GENERAL MARKET CONDITIONS

Silver and copper March futures expiry will be the key this week. Copper has zoomed while silver continues to under perform. When 2008 started, there were apprehensions on base metals demand which resulted in a build up of short positions. However in the beginning of February when it became clear that base metals demand may not fall as much, the short positions in base metals were converted into long positions. The continuous decline in LME stocks added to investment demand in base metals. Base metals are bullish in the medium term. LME copper can rise to $9000 while LME nickel can rise over $40,000 over the coming months. However I will be cautious going long in base metals at the current levels as there is too hype much over base metals demand.

Another thing to watch out this week is whether the Euro/USD is able to break 1.50. The Eurozone economy has shown mild resilience to the US slowdown which could result in the European central bank delaying its interest rate reduction beyond June. Euro/USD has to break 1.50 in the next fortnight and failure to do so result in 1.4325 and 1.4036. A weaker US dollar always supports gold.

The technical picture in gold, silver and copper is still bullish. Metals have fallen as and when they neared key technical supports. Geopolitical risk has resurfaced once again with the Turkish invasion on northern Iraq and Iran unable to answer united nations questions on the nuclear issue. Turkey, Iran and Iraq are still at a nascent stage but have the potential to blow up further.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$944.0

Gold has to break $959-$965 zone for $978 and $989. Key support at $942, $931.60

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $97.52

Only a break of $102 will result in $107 and $112. Key weekly support at $95.31 and $97.52.

MCXARUN
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