Bullion intraday

· Gold surged to a record $1,033.90 an ounce inNew York as credit-market losses and a weak dollar drove investors into the safety of the precious metal.

· The Federal Reserve cut the interest rate on direct loans to banks in an emergency meeting and stocks plunged worldwide after Bear Stearns Cos. accepted a buyout from JPMorgan Chase & Co. to avoid collapse. The dollar fell to $1.5903 against the euro, the lowest ever. Gold has jumped 21 percent this year as the Standard & Poor's 500 Index has fallen 13 percent.

· The Fed first reduced the so-called discount rate seven months ago from 6.25 percent as losses in the credit market mounted. After today's cut, the rate stands at 3.25 percent.

· Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, was at 653 metric tons as of March 14. It reached a record 655 metric tons on March 10.

· Policy makers also have reduced the federal-funds rate five times since Sept. 18 from 5.25 percent to 3 percent. Interest- rate futures show an 86 percent chance the Fed will reduce the benchmark overnight lending rate to 2 percent tomorrow, compared with a 14 percent chance a week ago. The dollar has fallen 11 percent against the euro since mid-September while gold has rallied 40 percent. Banks have posted more than $181 billion in writedowns and losses related to the subprime-mortgage crisis.

US Economy:

· Over the weekend, the Federal Reserve reduced the discount rate from 3.50% to 3.25%, but made no change to the federal funds rate. They also created at new lending facility to provide short-term liquidity to investment banks. The White House scheduled a meeting today to discuss the financial markets and the Federal Reserve's Open Market Committee meets tomorrow. The December eurodollars are trading higher.

· Bear Stearns shares closed at $30 after Friday's big drop, but over the weekend, JPMorgan bought the entire company for $2 per share with the approval of the U.S. government. Bear Stearns shareholders, understandably may not like the deal, but probably have no realistic alternative. That transaction will be debated for a long time. The June S&P 500 is steady to lower.

· The Federal Reserve said that industrial production was down .5% in February, weaker than expected and the biggest monthly drop since October.

· The New York Federal Reserve's manufacturing index fell from -11.7 to -22.2 in March, a new record low and a sign of further contraction.

Currency Update:

· StatisticsCanada said that factory sales were up 1.3% in January, helped by a 4.5% gain in auto sales.

· The June Japanese yen is trading sharply higher, benefitting from U.S. dollar woes andJapan's light exposure to the subprime mortgage mess.

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 above 13165 Target 13230 and 13260 Stop loss at 13115


MCX Silver May (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 May: Buy above 26300 Target 26650 and 26850 Stop loss 26115

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