BULLION intraday

Gold rises highest in a month
30 June 2008 10:40:02

Gold rose to the highest in a month as record energy costs boost demand for the precious metal as a hedge against inflation. Silver also gained. Crude-oil futures reached an all-time high above $142 a barrel on Friday and have doubled in the past year. Gold climbed to a record $1,033.90 an ounce in March as a slumping dollar and soaring raw-material prices spurred investors to purchase precious metals to protect against a loss of purchasing power.

Gold headed for a second weekly gain as crude oil rose to a record and the dollar weakened, boosting the appeal of the metal as a hedge against inflation and an alternative investment to the U.S. currency. And it has extended the rally that began after Wednesday's FOMC statement put on hold the possibility of higher U.S. interest rates that rallied the euro. And now crude oil has surged further, adding to worries about inflation.

The fortunes of gold remain closely tied to the course of the dollar for now, with an improvement in the currency's fortunes against the other major currencies not seen on the near-term horizon. But expectations are that when the dollar does begin to sustain a recovery, the slide in gold prices would be swift and furious.
New crest Mining Ltd. (NCM.AU) said gold production at its Telfer mine in Western Australia will be between 20,000 and 25,000 ounces lower in June due to the impact of gas shortages. it is now expecting gold production from Telfer of between 700,000 ounces and 750,000 ounces for fiscal 2009.

Gold will probably rally to $1,000 an ounce by the end of the year and ``work higher'' in the next two years, Citigroup Inc. said

ETF Securities Ltd., manager of $6 billion of commodity-backed investments, agreed to buy the two- thirds of two gold funds it didn't already own from the World Gold Council, doubling its assets of the precious metal. ETF bought control of Lyxor Gold Bullion Securities in London and Gold Bullion Securities in Melbourne from the World Gold Council's Gold Bullion Holdings for an undisclosed price, Jersey-based ETF Securities said in a statement. The two products have gold assets of 126 metric tons (4.05 million ounces) compared with 1.3 million ounces at ETF Securities.

U.S.Economy:

The U.S. Commerce Department said that personal incomes were up 1.9% in May while consumer spending was up .8%. The higher figures were attributed to the government's stimulus checks.

The Commerce Department also said that the core rate of personal consumption expenditures (an inflation indicator) was up .1% in May and up 2.1% from a year ago, less than expected.

The University of Michigan's index of consumer sentiment dropped from 59.8 to 56.4 in June, a little less than expected

Currencies update:

The yen strengthened from a record low against the euro and rose versus the dollar as a slump in stock markets around the world reduced demand for higher- yielding assets funded by loans in Japan.

ECB President Jean-Claude Trichet virtually pre-announced a rate hike at the central bank's last news conference, when he said that the council had moved to a state of "heightened alertness" on inflation risks and that it could raise rates by a small amount at the July 3 meeting.

The U.K.'s Office for National Statistics said that real GDP was up 2.3% in the first quarter from a year ago, down from its 2.5% estimate a month ago and weaker than expected. Nominal GDP was up 5.3% in the first quarter from a year ago.

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.

Recommendations-MCX Silver July: Buy at 24660 Target 24890 and 25040 stoploss at 23495

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