bullion intraday

Bullions
23 May 2008 10:27:56



Bullion

Major Headlines:

Gold fell from a one-month high as the dollar rebounded against the euro and crude oil dropped from a record, eroding the appeal of the precious metal as a hedge against inflation. Silver also declined.

The dollar snapped a two-day slide, rising from the lowest in a month against the euro. Before today, gold had gained 11 percent this year as the euro climbed 8.3 percent against the dollar.

Rocketing oil prices, which Thursday struck a record $135.09, stoked inflation fears to which the precious metal is often bought as a hedge and stemmed gold's losses. Meanwhile, some say there is a strong chance the dollar could fall again, which would likely boost gold.

The dollar rose on speculation the Federal Reserve will raise borrowing costs by the end of the year to fight inflation. Traders see a 30 percent chance the Fed will raise its target interest rate by a quarter-percentage point to 2.25 percent in September, up from 21 percent yesterday, according to futures on the Chicago Board of Trade.

Russia's foreign currency and gold reserves, the world's third largest, rose to a record $540.8 billion last week, the central bank said. The value of reserves increased by $4 billion in the week ended May 16, Moscow-based Bank Rossii, The reserves gained $2.9 billion in the previous week.

Gold sales in the United Arab Emirates rose 15 percent in the first quarter, Asharq al-Awsat reported, citing the World Gold Council. Sales in the first quarter reached 3.1 billion dirhams ($844 million) from 2.7 billion dirhams in the year-earlier period, the Saudi-owned newspaper said, citing the council.

Gold has trekked higher for five straight sessions -- gaining 7 percent in the past week -- as crude's seemingly relentless drive higher adds to growing inflation fears and boots demand for safe-haven assets like gold and silver. Precious metals are traditionally viewed as hedges against inflation because they're known for holding their value.

U.S.Economy:

The U.S. Labor Department said that jobless claims were down 9,000 last week to 365,000, less than expected.

Currencies update:

Statistics Canada said that retail sales totaled C$35.5 billion in March, up .1% on the month. They also noted that the operating profits of Canada's corporations totaled C$67.8 billion in the first quarter of 2008, down 1.1% from the previous quarter.

The U.K.'s Office for National Statistics said that retail sales volume was down .2% in April.

Eurostat said that its index of industrial new orders for the Euro area 15 was down 1.0% in March and down 2.5% from a year ago.

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 12923 levels. If market breaches 12923 may see prices to take further upside towards 13105 and 13212 however if it holds back below 12634 may see prices to fall further on today. Major support is seen at 12527 and 12345

Recommendations–MCX Gold June: Sell at 12820 Target 12745 and 12610 Stoploss at 12865

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 25315 levels. If market breaches 25315 may see prices to take further upside towards 25709 and 26034 however if it holds back below 24596 may see prices to fall further on today. Major support is seen at 24271 and 23877

Recommendations-MCX Silver July: Sell at 25110 Target 24820 and 23650 Stop loss at 25250

MCXARUN
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