Base Metals

Major Headline:

Aluminum dropped to a two-month low in London on speculation producers will increase output as an economic slowdown stalls demand from home builders. Copper fell to a nine-month low.

Aluminum output will exceed demand through 2008 after a supply deficit of 410,000 metric tons last year, Societe Generale SA said in a Dec. 14 report. The price of the metal used in construction, cars and beverage cans has dropped 14 percent this year and is headed for its first annual decline in five years.

Copper tumbled to a nine-month low on speculation that a slumping U.S. economy will erode demand for the metal used in homes, cars and appliances.

Manufacturing in New York this month expanded at the weakest pace since May, a report showed today. Former Federal Reserve Chairman Alan Greenspan said on Dec. 16 that U.S. growth is ``getting close to stall speed.'' Copper dropped 5.4 percent last week on concern consumption will fall in the U.S., the world's second-largest user of the metal.

European stocks fell on concern the combination of faster inflation and losses related to the collapse of U.S. subprime mortgages will sap economic growth.

BHP Billiton Ltd., the world's largest mining company, and Rio Tinto Group dropped as copper tumbled to a nine-month low. UBS AG and Deutsche Bank AG led bank shares lower. Assicurazioni Generali SpA paced declines among insurers after UBS downgraded the stock.

The Dow Jones Stoxx 600 Index fell 1.4 percent to 362.02 as of 4:06 p.m. in London. Widening losses tied to the U.S. mortgage market have dragged the measure down 9.6 percent from a 6 1/2-year high reached June 1. All 18-industry groups except food & beverage retreated today.

copper Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Sell at 256-257 for the target of 250.20, 247 and 242 with stop loss at 261.50

zinc Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Dec: Sell at 91.90-92.30 for the target of 90.10 and 89.10 with stop loss at 93.20

nickel Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Nickel Dec: Sell at 1025-30 for the target of 1005 and 995 with stop loss at 1039


lead Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are on hold from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Lead Dec: Sell at 96.50-97.00 for the target of 94 and 92 with stop loss at 98.50
MCXARUN

Bullion

Gold fell for a fourth trading day in MCX/ Comex as the dollar strengthened against the euro, eroding the metal's appeal as a hedge against declines in the U.S. currency. Silver also declined.

Fading chances of further interest rate cut by Fed higher than expected consumer inflation data underpinned dollar on Friday. The dollar index rose 1.1% at 77.445, its highest level since Oct. 25. Higher inflation would deter Fed to make further cut in interest rates. The precious metal market seems focusing on the currency movements at this stage and thus ignored the higher inflation figures. Higher inflation is often seen as supportive for gold as it increases the investment demand for the metal as inflation hedge. Consumer prices rose 0.8% in November.

Investment demand for gold accelerated in the second half of 2007 after some weakness in first half. Gold holdings of the world's largest gold exchange-traded fund, streetTRACKS have surged from 464.37 tonnes at the end of June to 615.90 tonnes on December 13.

India's gold jewelry exports rose 13% in the first eight months of the financial year that started in April to $3.87 billion according to the Gem and Jewelry Export Promotion Council. In the financial year ended March, India exported around $5 billion worth of gold jewelry, half of which went to the US.

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Sell blow 10150-170 for the target of 10080 and 10020 with stop loss at 10222

silver Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:
MCX Silver March: Sell at 18450-490 for the target of 18310, 18180 and 18050 with stop loss at 18652

OUT LOOK

February gold closed slightly higher on Monday as it consolidated some of last Friday's decline but remains below the 10-day
moving average crossing at 806.80. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the
RSI remain bearish signaling that sideways to lower prices are possible near-term. If February extends last week's decline,
November's low crossing at 780.40 is the next downside target. Closes above last Wednesday's high crossing at 822.80 would
renew the rally off November's low. From a broad perspective, February gold needs to close above 855.00 or below 780.40 to
confirm a breakout of the late-fall trading range and point the direction of the next trending move. First resistance is the 20-day
moving average crossing at 806.80 then last Wednesday's high crossing at 822.80. First support is today's low crossing at
789.60 then the reaction low crossing at 783.00.

March silver closed higher on Monday and as it consolidated some of last week's decline. The high-range close sets the stage for
a steady to higher opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible
near-term. Closes below the reaction low crossing at 13.960 would open the door for a possible test of October's low crossing
at 13.360 later this winter. Closes above the 20-day moving average crossing at 14.544 would signal that a short-term low has
been posted. First resistance is the 20-day moving average crossing at 14.544 then last Tuesday's high crossing at 14.975. First
support is today's low crossing at 13.640 then October's low crossing at 13.360.

January crude oil closed lower on Monday as it extended the decline off last week's high. The low-range close sets the stage for
a steady to lower opening on Tuesday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices
are possible near-term. Closes below the 10-day moving average crossing at 90.01 would temper the near-term friendly outlook
in the market. If January renews last week's rally, the reaction high crossing at .9768 is the next upside target. A close below
the reaction low crossing at .8582 would renew the decline off November's high. First resistance is the 20-day moving average
crossing at 92.10. Second resistance is last Thursday's high crossing at 94.85. First support is today's low crossing at 89.49
then the 38% retracement level of this year's rally crossing at .8741.


January Henry natural gas closed slightly higher on Monday as it consolidated some of last week's decline but remains below
the 10-day moving average crossing at 7.161. The high-range close sets the stage for a steady to higher opening on Tuesday.
Stochastics and the RSI are neutral signaling that sideways to lower prices are possible near-term. If January extends the decline
off November's high, weekly support crossing at 6.801 is the next downside target. Closes above the 20-day moving average
crossing at 7.422 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average
crossing at 7.161 then the 20-day moving average crossing at 7.422. First support is Today's low crossing at 6.914 then weekly
support crossing at 6.801.

saxo bank report

Precious metal prices have been trading sideways for the past month

Precious metal prices have been trading sideways for the past month. We believe the main risk to the complex is a renewed pocket of US dollar strength, which has tended to be the seasonal patterns of the US dollar in the first four weeks of a new year.

January Gold (ZGG8) below $800/oz focus is towards $783 support.

Note: the support/resistance levels used in the matrix’s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.

GOLD SILVER
ZGF8 ZIF8
Resist. Resist.
825.8 14.769
811.5 14.357
803.6 14.109
792.1 13.83
789.3 13.697
782.9 13.533
768.6 13.121
Support Support
26dMA 49dMA
804.4 14.347
10dMA 10dMA
802.9 14.359
MCXARUN

Technicals – MCX (Intra day calls)

CRUDE OIL (January) BULLISH ABOVE 3604 BEARISH BELOW 3590

GOLD (February) BULLISH ABOVE 10185 BEARISH BELOW 10150

SILVER (March) BULLISH ABOVE 18555 BEARISH BELOW 18470

COPPER (February) BULLISH ABOVE 260.10 BEARISH BELOW 258.90

LEAD (December) BULLISH ABOVE 98 BEARISH BELOW 97.60

NICKEL (December) BULLISH ABOVE 1038 BEARISH BELOW 1034

ZINC (December) BULLISH ABOVE 92.40 BEARISH BELOW 92.00

Energy

Energy


Major Headline:

Crude oil fell for a second day on concern demand will stagnate, as strengthening inflation in the U.S. may curb any further interest rate cuts.

Oil has dropped 8 percent from a record in November on signs of weakening demand. U.S. Consumer prices rose more than forecast last month, driven by higher energy costs, a government report today showed. The Federal Reserve voiced concern that inflation may gain when it cut interest rates earlier this week.

The International Energy Agency increased its estimate of 2008 world oil demand to 87.8 million barrels per day (mbd), higher than the U.S. Department of Energy's estimate of 87.2 mbd. Either way, it is going to be interesting to see how (or if?) producers keep up. February crude oil closed down .91 at $91.55 with serious concerns about a slowing U.S. economy.

While the northeastern U.S. digs out from yesterday's heavy snow, a mix of rain and snow will fall on winter wheat country in the south central plains today and eventually bring more snow to the Northeast by Sunday. February heating oil closed down 1.03 cents at $2.6009.


Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 and 18 days moving average. The downside closing price reversal on the daily chart is somewhat negative. Over all technical suggest a bullish market and prices are expected to go further up.

Recommendations:

MCX Crude Oil Jan: Buy at 3560-70 for target of 3655 and 3680 with stop loss below 3535

natural gas
Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 and 18 days moving average. The downside closing price reversal on the daily chart is somewhat negative. Over all technical suggest a bullish market and prices are expected to go further up.

Recommendations:

MCX Natural Gas Jan: Sell at 285-290 for the target of 275 and 265 with stop loss at 310

copper,zinc,nickel,lead

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Sell at 261-262 for the target of 257, 255 and 252 with stop loss at 265.50

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Dec : Sell at 92.60-93.00 for the target of 91 and 90.10 with stop loss at 93.80



METALS & ENERGY

December 17, 2007



Bullion

Major Headline:

Gold fell to a one-week low as a rally in the dollar eroded the appeal of the precious metal as an alternative investment. Silver also declined.

The dollar rose the most against the euro since May 2005 after reports showing higher consumer prices fueled speculation the Federal Reserve will keep interest rates steady. Gold generally moves in the opposite direction of the U.S. currency. The metal has gained 25 percent this year as the dollar dropped 8.5 percent against the euro.

The dollar has climbed against 13 of the 16 most-actively traded currencies today as speculation grew that the Fed would be less likely to cut interest rates in the face of accelerating inflation.

The consumer price index rose 0.8 percent in November, the most in more than two years, the Labor Department said today. Wholesale prices rose 3.2 percent last month, the biggest jump in 34 years, the agency said yesterday.

The Fed has lowered the overnight lending rate 1 percentage point to 4.25 percent this year. Lower rates have bolstered gold and hurt the dollar, sending the U.S. currency to $1.4967 against the euro on Nov. 23, the lowest ever. The dollar traded as high as $1.4412 today. Gold reached $848 on Nov. 7, the highest since January 1980.

MCX Gold Feb (Daily Chart)



Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Sell blow 10180 for the target of 10140 and 10120 with stop loss at 10222

MCX Silver Mar (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Silver March: Sell at 18550-560 for the target of 18415 and 18355 with stop loss at 18652

Base metals

Major Headline:

Copper dropped, capping a second straight weekly decline, on concern a weakening economy will shrink U.S. demand.

The Federal Reserve's moves this week to lower borrowing costs and increase liquidity in the banking system may not be enough to alleviate the credit squeeze and stimulate growth, traders said. Copper dropped 5.4 percent this week on speculation U.S. consumption will decline.

Industrial production in the U.S. rose 0.3 percent in November as factories made more cars and consumer electronics, the Fed said today. Economists expected a gain of 0.2 percent, according to the median of 78 forecasts in a Bloomberg News survey. Copper has dropped 20 percent since Oct. 1 on speculation slowing growth will shrink U.S. demand.

Hindustan Zinc Ltd., India's largest producer of the metal, cut zinc prices by 1.3 percent, to match the fall in global rates. Zinc prices were cut to 108,200 rupees ($2,747) a ton from 109,600 rupees a ton effective today. 1.7 percent, or 2,000 rupees a ton to 113,900 rupees reduced lead prices, the company said in the statement.


MCX Copper Feb (Daily Chart)



Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Sell at 261-262 for the target of 257, 255 and 252 with stop loss at 265.50

MCX Zinc Dec (Daily Chart)



Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Dec : Sell at 92.60-93.00 for the target of 91 and 90.10 with stop loss at 93.80

MCX Nickel Dec (Daily Chart)



Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.



Recommendations:
wait to trade

Technical Outlook:

Momentum studies are bullish and now at sold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 18-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Lead Dec: Sell at 98.20 –98.60 for the target of 96 and 94 with stop loss at 100.20