bullion intraday

Bullion
21 May 2008 10:46:22



Major Headlines:

Gold rose in New York for the fourth straight session as a weaker dollar and higher energy costs boosted the precious metal's appeal as a hedge against inflation.

The dollar fell after the International Monetary Fund said the U.S. housing slump still poses ``serious risks'' to financial markets and Gold Gained, extending this month's rally, on speculation declines in the dollar and rising commodity prices will spur inflation, reviving demand for the metal as a hedge. Platinum, palladium and silver also gained



According to a report issued by the World Gold Council, preliminary data showed that during the recent Akshaya Thritiya -- a Hindu festival considered an auspicious time to buy gold -- has generated lower sales than in 2007 because of high prices. Gold sales during the May 7-8 Akshaya Trithiya festival were lower by 11 percent at 48.99 tones, as against 55 tones a year earlier.



Gold traded above $920 an ounce and as the crude oil's holding above $128 a barrel boosted energy costs and appeal of bullion as hedge against inflation. Crude oil futures in New York rallied to a record $129.29 a barrel yesterday while gold reached $924.40 an ounce, the highest since April 23. The surge in oil spurred a 3.4 percent gain in the Reuters/Jefferies CRB Index of 19 commodities this month.



Gold demand in the first quarter was 701.3 metric tons, the lowest in 5 years and down 16 percent from a year earlier, the World Gold Council said today. In India, the biggest user, consumption fell 50 percent and the world mine production totaled 593 tons, up slightly from a year ago

April month Gold holdings fell at Swiss National Bank in Zurich by 401.4 ounce from 35,790 ounce (March 2008)



U.S.Economy:

The U.S. Labor Department said that the producer price index was up .2% in April and up 6.5% from a year ago, less than expected and down from a 6.9% annual gain in March. Excluding food and energy, prices were up .4% in April and up 3.0% from a year ago. The March eurodollars are steady to higher.

The Chicago Federal Reserve's index of national activity slipped from -.98 to -1.17 in April. Only 21 of the 85 indicators used registered positive growth

Currencies update:

An index of service in Japan, the tertiary index, was up .3% in March, less than expected. Also, the Bank of Japan met and kept the interest rate unchanged at .50% with concerns about a slowing economy. The June yen is steady to higher.

The June Australian dollar is steady to higher after minutes from the latest meeting at the Reserve Bank of Australia showed consideration of another increase in the interest rate.

Producer prices in Germany were up 1.1% in April, the biggest monthly jump in over two years. The euro was well bid above $1.56 after an early blip, buoyed by comments from the head of a leading research institute in Germany suggested that the European Central Bank will be forced to hike borrowing costs if inflation remains high.

MCX Gold June (Daily Chart)

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 12736 levels. If market breaches 12736 may see prices to take further upside towards 12841 and 13033 however if it holds back below 12439 may see prices to fall further on today. Major support is seen at 12247 and 12142


Recommendations–MCX Gold June: Buy at 12550 Target 12635 and 12710 Stoploss at 12505


MCX Silver July (Daily Chart)

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 24546 levels. If market breaches 24546 may see prices to take further upside towards 24832 and 25364 however if it holds back below 23728 may see prices to fall further on today. Major support is seen at 23196 and 22910



Recommendations-MCX Silver July: Buy at 24120 Target 24320 and 24650 Stop loss at 23950

MCXARUN
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