bullion intraday

Bullion
15 May 2008 09:49:42



Indian spot gold closed lower on Wednesday, tracking international bullion markets amid moderate domestic demand and traders are expecting a correction in oil prices, which will bring down prices of gold, which is used as a hedge against inflation



The stronger dollar is keeping gold lower and its fall third day as the dollar rose against the euro, diminishing the metal's appeal as a hedge against declines in the U.S. currency. Platinum and silver also dropped. Bullion has moved in the opposite direction to the dollar this year, gaining 4 percent as the currency declined 6 percent against the euro.



There's no buying interest in gold at the moment, the consumer price index rose 3.9 percent compare to previous of 4 percent in the 12 months ended in April, the Labor Department said yesterday. Gold rallied 31 percent last year as soaring fuel expenses helped spur a 4.1 percent jump in consumer prices. The metal is still down 16 percent from a record $1,033.90 an ounce on March17.

Workers at a mine owned by Harmony Gold Mining Co.,Africa's third-biggest gold producer, ended a protest after earlier refusing to go underground because of excessive heat. Almost 1,000 workers at one of theVirginia mine's five shafts had refused to go underground because of heat and ventilation problems,

India's rupee fell to the lowest level since April 2007 on speculation record crude oil prices will widen the nation's trade and current-account deficits, increasing demand for foreign currencies.

The rupee declined for a third day as local refiners increased dollar purchases to pay for imports of crude, which reached an all-time high of $126.98 a barrel in New York Tuesday. The currency also weakened after data from India's capital markets regulator showed overseas investors added to sales of local equities

U.S.Economy:

The U.S. Labor Department said that the consumer price index was up .2% in April and up 3.9% from a year ago, a little less than expected. Excluding food and energy costs, prices were up .1% in April and up 2.3% from a year ago. The June U.S. T-bonds is steady to higher.

The Mortgage Bankers Association said that its index of mortgage applications was up 2.9% last week, helped by refinancing activity.

Currencies update:

The U.K.'s Office for National Statistics said that the unemployment rate for January to March remained at 5.2%, the same as three months ago. Also in January to March, 84,000 full-time jobs and 33,000 part-time jobs were added. The June British pound is steady.

Industrial production in the Euro area 15 was down .2% in March after a gain of .3% in February.

Australia's Bureau of Statistics said that hourly wages were up .9% in the first quarter of 2008, less than expected. The June Australian dollar is trading lower


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 negative and the support is seen at11775 if market breaches below11775 may see prices to take further correction towards11729 and 11663 however if it holds back above11887 may see prices to rise further on today. Major resistance is seen at 11953 and 11999

Recommendations–MCX Gold June: Sell at 11875 Target 11780 and 11710 Stoploss at 11925



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 negative and the support is seen at22816 if market breaches below22816 may see prices to take further correction towards22682 and 22424 however if it holds back above23208 may see prices to rise further on today. Major resistance is seen at 23466 and 23600

Recommendations-MCX Silver July: Sell at 23180 Target 22880 and 22650 Stop loss at 23390

MCXARUN
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