bullion intraday

Bullion
07 May 2008 10:07:06



Gold rose for a third consecutive trading session as crude oil gained, spurring investors to buy the metal as a hedge against inflation. Platinum and silver also advanced.

Dollar weakness has encouraged some investors to buy into hard commodities of late, in a bid to hedge against weakness in the U.S. currency and rising inflation

ECB Says Gold And Gold Receivables Remained Unchanged In Week

The bargain hunters among precious metals traders surely came out of the woodwork yesterday, a welcome sign after the beatings absorbed last week. And all last month, for that matter, as gold fell by 6.1% in April, the biggest monthly drop in four years.

It was also a very supportive week on the part of the usual suspects, surging energy prices and a dollar that has begun collapsing again after its strength in the wake of the latest round of interest rate cuts

Crude oil traded at a record $122 a barrel in New York today and Goldman Sachs Group Inc. said the fuel might reach $150 to $200 within two years. European Central Bank President Jean- Claude Trichet yesterday said he saw significant global inflation risks because of higher commodity prices

These are rich times for many gold miners. Barrick Gold, the world's largest gold producer, said that it earned $514 million in the first quarter, up from a $159 million loss a year ago. They also said that they expect to produce around 7.8 million ounces this year at a cash cost of roughly $400 per ounce.

On the other hand, the world's third largest gold producer, AngloGold Ashanti, posted a loss in the first quarter because much of its gold sales were hedged at a lower price



The downward pressure on new gold supply is still there. People aren't producing the gold that you would expect at these gold prices. Fundamentally, there's good support for the gold price.’ On gold averaging $900 an ounce this year, said Mark Bristow, chief executive officer of Randgold Resources Ltd.,



Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, has dropped 13 percent to 580.4 metric tons from a record 663.8 tons on March 17



U.S. Economy:

More than half of the banks surveyed by the Fed said they had tightened commercial and industrial loans, commercial real estate loans, residential mortgages, and home-equity lines of credit. Almost no banks eased credit terms for any type of loan, the Fed said in its quarterly senior loan officer survey

Currencies update:

An index of services in the U.K. fell from 52.1 to 50.4 in April, weaker than expected.

The Reserve Bank of Australia met and kept its interest rate unchanged at 7.25%, saying that there is evidence that domestic demand is slowing.

Canada issued C$5.6 billion of building permits in March, down 4.5% on the month



MCX Gold June

Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 11672 levels. If market breaches 11672 may see prices to take further upside towards 11754 and 11859 however if it holds back below11485 may see prices to fall further on today. Major support is seen at 11380 and 11298





Recommendations–MCX Gold June: Buy at 11540 Target11690 and 11760 Stoploss at11490



MCX Silver July

Technical Outlook: The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 22835 levels. If market breaches 22835 may see prices to take further upside towards 23019 and 23247 however if it holds back below 22423 may see prices to fall further on today. Major support is seen at 22195 and 22011

Recommendations-MCX Silver July: Buy at 22520 Target 22710 and 22850 Stop loss at 22370


MCXARUN
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