Bullion intraday

· Gold gained in MCX/COMEX reversing an earlier decline, after the dollar fell against the euro on concern the Federal Reserve's plan to provide funds to banks won't be enough to revive lending among banks.

· The Fed said yesterday it will make as much as $200 billion available to revive lending among banks. The plan drove the Standard & Poor's 500 Index to its biggest gain in more than five years. Asian stocks rallied yesterday.

· The Federal Reserve has sold outright of 15 bln usd in Treasury bills maturing in May and June. The so-called coupon pass sold 3 bln usd each of T-bills maturing on May 8, 15, 22 and 29 and on June 5. Bids for the 15 bln usd in T-bills totaled 57 bln usd. The sale permanently changes the size of the Fed's System Open Market Account (SOMA) portfolio, transferring cash from the financial markets to the Fed's account.

· The euro continued to trade close to record highs against the dollar after euro zone industrial production data came in well above forecasts, suggesting that the European Central Bank will not be cutting interest rates any time soon.

· Data show industrial output for the region rose by 0.9 pct from December for a very strong 3.8 pct annual gain, far above the forecasts for much more moderate increases of 0.3 pct and 2.5 pct, respectively.


MCX Gold Apr

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 12650 Target 12715 and 12760 Stop loss at 12615

MCX Silver May

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 May: Buy at 25550 Target 26000 and 26220 Stop loss 25315


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