bullion intraday

Bullion
06 June 2008 11:16:37



Bullion June 06 2008

Major Headlines:


Bullion prices jumped Thursday after the dollar fell in response to comments by European Central Bank President Jean-Claude Trichet suggesting the bank could raise interest rates, in earlier Gold futures fell to a three-week low at New York as a strengthening dollar reduces demand for the precious metal as a hedge against inflation. Silver gained.

Platinum and palladium fell for the third straight day on speculation a slump in U.S. auto sales will erode demand for the metals used in pollution-control devices in cars.U.S. auto sales in May tumbled 11 percent, the most this year and the seventh consecutive monthly slide. Carmakers around the globe account for more than 60 percent of platinum consumption, according to Johnson Matthey Plc, which makes about a third of the world's auto catalysts.

The U.S. Dollar Index, a weighted measure against the euro, yen and four other major currencies rose as much as 0.6 percent today before retreating. The gauge had gained for seven of the past eight sessions. In March, the dollar's plunge to a record helped send gold to the highest ever.

Barclays Capital said gold and other precious metals will be higher than previously forecast and predicted platinum has the ``best'' prospects. Gold will average $890 an ounce in the third quarter, up from an earlier forecast of $860; while platinum will be $2,220 an ounce, from $1,950 previously, London-based analysts including Suki Cooper wrote in a report, Platinum will advance through next year while gold will decline, the report said.

HSBC Holdings Plc's China business said it has become the first foreign bank to win approval to trade on the Shanghai Gold Exchange. China may overtake South Africa as the world's biggest gold producer this year, the nation's demand for gold jumped 23 percent in 2007, making it the world's second-largest consumer, as a booming economy spurs jewelry purchases.


Anglogold Ashanti Ltd., Africa's largest gold company, said output in Ghana will increase 10 percent this year, on higher production at the Iduapriem mine and as it starts an investment program at Obuasi. Total output is expected to climb to 602,000 ounces in 2008,While Ghana's overall production climbed 11 percent to 2.49 million ounces in 2007, AngloGold's output in the country dropped 6 percent because of a national power crisis. Ghana is Africa's second-biggest producer after South Africa


U.S.Economy:

The U.S. Labor Department said that jobless claims were down 18,000 last week to 357,000, lower than expected

Currencies update:

The Bank of England kept its interest rate unchanged at 5.0% and the European Central Bank kept its interest rate at 4.0%.

Euro zone interest rates are now expected to go up 25 basis points next month after European Central Bank President Jean-Claude Trichet caught the market off guard by explicitly raising the
Possibility of a rate rise at the July 3 ECB meeting, Trichet said "it is possible" that the Governing Council could increase interest rates by "a small amount" at its next meeting to ensure inflation
Expectations are anchored solidly.

Germany's factory orders were down 1.8% in April, the fifth consecutive decline. Even so, ECB President Trichet said that the central bank may soon raise the interest rate to restrain inflation.

In Canada, C$6.4 billion of building permits were issued in April, up 14.5% from March and the most in six months.

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 sideways and the resistance is seen at 12269 levels. If market breaches 12269 may see prices to take further upside towards 12357 and 12486 However if it holds back below 12052 may see prices to fall further on today. Major support is seen at 11923 and 11835

Recommendations–MCX Gold June: Sell at 12290 Target 12210 and 12090 Stoploss at 12345

MCX Silver July - Technical Outlook:

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 24258 levels. If market breaches 24258 may see prices to take further upside towards 24595 and 25167 However if it holds back below 23349 may see prices to fall further on today. Major support is seen at 22777 and 22440

Recommendations-MCX Silver July: Sell at 24260 Target 23920 and 23880 stoploss at 24435

MCXARUN
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