GENERAL MARKET CONDITIONS

Dubai Multi Commodities Centre plans to start a venture with the World Gold Council to trade the first Islamic securities backed by gold bullion. Through a joint venture called Dubai Gold Investments, the partners plan to create Dubai Gold Shares and list them on the Dubai International Financial Exchange Ltd. Dubai Gold Shares will comply with Islamic Shariah law. The shares will allow holders to gain from advances in the price of gold without having to insure, store and move the metal. Each Dubai Gold Share will represent 0.1 ounce of gold held in custody by the center and HSBC Holdings Plc. This will ensure the securities comply with Islamic principles. After gold related investment instrument similar to exchange traded funds. Very positive news for gold. This could lead to scarcity of gold in the markets. Investment in this instrument will near the total investment in exchange traded funds. Followers of Islam in India would love to have a similar gold investment instrument in India.

IMF gold sales once again are in the headlines. The IMF plan to cut 380 jobs and sell 403.3 tonnes of gold, about an eighth of its reserves, still has to be approved by other authorities. The reforms have the support of the US Treasury, but the gold sales must be approved by Congress, which is unlikely to happen until after the presidential elections this year. IMF gold sales will not have any impact on gold prices as demand is huge to absorb sales.

COPPER -- MAY FUTURE -- INTRA DAY PIVOT: $392.0

Copper targets $403.80 and $416.90 as long as $388 holds. Copper has to fall below $388 for $372.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $110.70

Crude oil targets $112.10 and $119.80 on a break of $110.60. Falls below $105.90 then $100.0. One needs to be cautious going long at higher prices.

INDIAN RUPEE (USD/INR)

The Indian rupee has been trading in 39.80-40.05 against the US dollar over the past few days. The government will allow the rupee to appreciate to control inflation. However the pace of appreciation will not be the same as 2007. A rising rupee has already closed some of the labour intensive units in handicrafts, garments and other sectors. If the rupee appreciates in the big way in 2008, there will be more job losses in the Indian export sector. For the day the rupee will trade in a 39.85-40.08 range.

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