bullion intraday

Bullion
02 June 2008 10:21:32



Bullion June 02 2008

Major Headlines:

Gold rose in New York on end of the week as some purchasers took advantage of a 4.8 percent plunge in price this week. Silver climbed more than 2 percent.The metal is headed for the worst weekly performance since mid-March as the dollar strengthened this week and crude oil fell from a record. Gold reached $1,033.90 on March 17, the highest ever, as the euro and crude oil set previous records

A rebound in oil prices also sparked purchases of precious metals, Gold moved in tandem with oil 92 percent of the time in 2007. Since March 17, gold has dropped, while oil has surged

Platinum also slid as the dollar was poised for its second monthly advance against the euro and it fell for a fourth consecutive session, trading down $33, or 1.7 percent, to $1,963.50 an ounce as it also headed for its first weekly decline in four.

This loss in the precious metal was extremely supported by the declining crude and the strengthened dollar. Gold is not visualized as a hedge against inflation no more as the US currency gets stronger; as a result the yellow safe asset is no longer an appeal to investors.

The dollar boosted as soon as the US growth was revised to 0.9% from the initial estimate of 0.6 percent. This growth enlarged expectations that the Federal bank will hike interest rates and as a result the dollar gained massively in its value and against majors pulling investors away from oil and gold towards it promising high returns.

Precious metals are trading lower on the spot market Friday, with platinum leading the way down, and market participants said the metals could fall further if the dollar continues to rise against the euro and crude oil falls

A slowdown in oil price rises could ease inflationary pressure, which could dampen the relative attractiveness of precious metals as inflation-hedge asset

U.S.Economy:
The U.S. Commerce Department said that personal incomes were up .2% in April while consumer spending was also up .2%, as expected. In March, personal incomes were revised up from .3% to .4%.
In the same report, the core rate of personal consumption expenditures, an inflation gauge, was up just .1% in April and up 2.1% from a year ago. The March Eurodollars are steady to higher.
The University of Michigan's index of consumer sentiment fell from 62.6 to 59.8 in May, the lowest in 28 years, but also up slightly from the estimate earlier this month.
The Chicago purchasing managers' index increased from 48.3 to 49.1 in May, better than expected.

Currencies update:

Statistics Canada said that real GDP was down .1% in the first quarter, but up 1.7% from a year ago, weaker than expected. It was the weakest performance in over four years. The June Canadian dollar is trading lower.
Eurostat said that the unemployment rate for the Euro area 15 remained at 7.1% in April. They also estimated that consumer prices were up 3.6% in May from a year ago, up from a 3.3% gain in April. The June euro is steady to higher.
Japan's Statistics Bureau said that consumer prices were down .1% in April, but up .8% from a year ago. The unemployment rate increased from 3.8% to 4.0% in April and household spending fell 2.7% in April from a year ago. The June yen is steady.
Real GDP in India was up 8.8% in the first quarter from a year ago, the same as in the fourth quarter of 2007
MCX Gold June - Technical Outlook:


The daily stochastic have crossed over down which is a bearish indication. The stochastic indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.





Market is expected to remain negative and the support is seen at 12120 If market breaches below 12120 may see prices to take further correction towards 12052 and 11980 However if it holds back above 12264 may see prices to rise further on today. Major resistance is seen at 12348 and 12476

Recommendations–MCX Gold June: Sell at 12290 Target 12220 and 12150 Stoploss at 12355

MCX Silver July - Technical Outlook:

The daily stochastic have crossed over down which is a bearish indication. The stochastic indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.



Market is expected to remain negative and the support is seen at 22964 If market breaches below 22964 may see prices to take further correction towards 22617 and 22349 However if it holds back above 23579 may see prices to rise further on today. Major resistance is seen at 23847 and 24194

Recommendations-MCX Silver July: Sell at 23690 Target 23450 and 23280 stoploss at 23865

MCXARUN
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