bullion intraday

Gold rebounded on speculation the Federal Reserve is unlikely to raise U.S. borrowing costs anytime soon, weakening the dollar and boosting the appeal of the metal as an alternative investment. Silver also gained

The metal has gained 6.7 percent this year as the dollar has lost 6.2 percent against the euro. Oil rose, trading within 2 percent of the record $139.89 a barrel reached June 16 and adding to concern that inflation will accelerate.

Gold held by SPDR Gold Trust rose 12.26 tons, or 2 percent, to 628.21 tons on June 23, according to the SPDR Gold shares. The holding is at the highest since April 22. Jersey-based ETF Securities Ltd. also said its funds linked to gold and platinum have raised in the past week.ETFS Physical Gold added $44 million last week; ETFS Physical Platinum attracted $32 million last week.

Silver prices have tracked gold prices closely and while Barclays Capital expects this to broadly continue, weak fundamentals will expose it to additional downside risk on any dips in the gold Price." In contrast to gold, the largest silver ETF, Barclay’s i-shares, recorded a hefty redemption of 46 tons, down 1% Monday, the second largest daily outflow in a week, Barclays says. Total holdings have fallen to their lowest level in six weeks at 5,972 tons

Gold prices are expected to trade in a range-bound manner over the forthcoming weeks as the key external drivers (dollar, oil) hang in the balance, while mine supply remains constrained, jewelry demand in price-sensitive countries has fallen sharply. In the near term, the focus will be on the FOMC decision today. However, some economic data before then is likely to put some modest downward pressure on the USD and in turn should underpin gold prices

The Euro system’s reserves of gold and gold receivables decreased EUR26 million to EUR209.376 billion in the week ended June 20, the European Central Bank said Tuesday


U.S.Economy:

The S&P/Case-Shiller index of U.S. home prices in 20 cities was down 1.4% in April and down 15.3% from a year ago, roughly as expected. It was also the biggest annual drop since records began in 2000.

The Conference Board's index of consumer confidence fell from 58.1 to 50.4 in June, weaker than expected, The Richmond Federal Reserve's index of manufacturing fell from -3 to -12 in June, also weaker than expected.

The Federal Reserve begins its two-day meeting today and is expected to keep the federal funds rate unchanged at 2.0% tomorrow when the meeting concludes.


Currencies update:

India's central bank raised interest rates for the second time this month and asked lenders to set aside more money as reserves to cool inflation running at a 13- year high. The repurchase rate was lifted to 8.5 percent from 8 percent and the cash reserve ratio to 8.75 percent from 8.25 percent

The dollar has gained 1.5 percent against the euro this quarter as traders bet the economic slowdown sparked by the collapse of the sub prime-mortgage market will spread to Europe as the U.S. recovers. For the year, the dollar is down 6.2 percent.

Norway's krone rose to two-week highs against the dollar and euro on speculation the central bank may signal the need for further interest-rate increases, boosting the appeal of the nation's higher-yielding assets. The currency of the world's fifth-largest crude supplier gained as oil, which climbed to a record on June 16, advanced for a third day.



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.

Technicals are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 12280 levels. if broken can see further fall to 12209 and 12133 If market holds above 12376 further rally can be seen towards 12429 and 12503

Recommendations–MCX Gold Aug: Sell at 12405 Target 12320 and 12210 Stoploss at 12452

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.

Technicals are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 23490 levels. if broken can see further fall to 23356 and 23125 If market holds above 23714 further rally can be seen towards 23841 and 24072

Recommendations-MCX Silver July: sell at 23715 Target 23600 and 23420 stoploss at 23870

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