Bullion

Gold rose after the dollar fell against the euro, boosting the appeal of the precious metal as an alternative investment. Silver also gained. Trading in gold is likely to remain sideways on thin trading towards the closure of the year and volatile action in currency and energy markets.



The dollar fell on Friday against 15 of the 16 most-active currencies. Investment in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, has climbed to a record 617 metric tons.



Gold also climbed on Friday on demand for a hedge against inflation, the U.S. Federal Reserve's preferred measure of inflation accelerated, a report by the Commerce Department showed.



The Fed, the European Central Bank along with central banks in Canada, Switzerland and the U.K., announced plans on Dec. 12 to coordinate efforts to add funds to the banking system to alleviate the credit squeeze stemming from sub prime mortgages.

MCX Gold Feb (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; 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 positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Gold Feb: Buy at 10340-330 for the target f 10380 and 10435 with stop loss at 10280

MCX Silver Mar (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; 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 positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Silver March: Buy at 19050-19000 for the target o 19180 and 19360 with stop loss at 18910