Technicals – MCX (Intra day calls)

CRUDE OIL (December) BULLISH ABOVE 3527 BEARISH BELOW 3512

GOLD (February) BULLISH ABOVE 10218 BEARISH BELOW 10184

SILVER (March) BULLISH ABOVE 19121 BEARISH BELOW 19039
COPPER (February) BULLISH ABOVE 268.05 BEARISH BELOW 267.35

LEAD (December) BULLISH ABOVE 113 BEARISH BELOW 112.60

NICKEL (December) BULLISH ABOVE 1048 BEARISH BELOW 1043

ZINC (December) BULLISH ABOVE 96.65 BEARISH BELOW 96.25

Medium-term Outlook (Spot Gold)

Gold prices are expected to trade within the range $837 - $770. Breaking of either level may decide the direction. $801 may act as the major resistance followed by $824 and $836. Supports are $754 and $744.
Oil prices fell to six-week lows overnight, shrugging off both an OPEC refusal to raise output and a big slump in US crude oil stockpiles.Instead, traders concentrated on growing gasoline and distillate inventories, a potential easing in tensions over Iran's nuclear program and concerns US economic growth may slow.
For the week ending Nov. 30, crude oil inventories fell by 8 million barrels, or 2.6 percent, to 305.2 million barrels, the Energy Department's Energy Information Administration said in its weekly report.

Gasoline inventories rose by 4 million barrels, or 2 percent, to 200.6 million barrel. Inventories of distillate fuel, which include diesel and heating oil, rose by 1.4 million barrels to 132.3 million barrels. At the same time, U.S. refineries remained steady running at 89.4 percent of total capacity on average.
Light, sweet crude for January delivery on the New York Mercantile Exchange fell 83 cents, or 0.9 per cent, to $87.49 a barrel, the lowest settlement for a front-month contract since October 24.
Brent crude on the ICE futures exchange settled $1.04 lower at $88.49 a barrel.
Last day, MCX gold February opened at 10288, traded in the range of Rs 10339 – Rs 10168 and closed at Rs 10240 per 10 gram.
Copper February in MCX opened at 266.25, traded in the range 269.95 – 262.40 and closed at Rs 267.40 per kg.

outlook

February gold closed lower on Wednesday ending a two-day short covering rally. The low-range close sets the stage for a steady
to lower opening on Thursday. Stochastics and the RSI are neutral to bullish hinting that a double bottom with November's low
appears to be forming. Closes above the 20-day moving average crossing at 810.20 would confirm that a short-term low has
been posted. If December extends last week's decline, November's low crossing at 780.40 is the next downside target. First
resistance is today's high crossing at 813.00 then the reaction high crossing at 844.20. First support is Monday's low crossing
at 783.00 then November's low crossing at 780.40.

March silver closed lower on Wednesday ending a two-day correction. The mid-range close sets the stage for a steady opening
on Thursday. Stochastics and the RSI are oversold and are turning bullish hinting that a short-term low might be in or is near.
Closes above the 20-day moving average crossing at 14.754 are needed to confirm that a short-term low has been posted. If
March extends last month's decline, the reaction low crossing at 13.500 is the next downside target. First resistance is the 10-
day moving average crossing at 14.559 then the 20-day moving average crossing at 14.754. First support is Monday's low
crossing at 13.960 then the reaction low crossing at 13.500.

January crude oil closed lower on Wednesday and below the 38% retracement level of this fall's rally crossing at .8741 as it
extends last week's decline. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the
RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If January extends
the decline, the 50% retracement level of this fall's rally crossing at .8374 is the next downside target. Closes above the 20-day
moving average crossing at 93.28 would temper the near-term bearish outlook. First resistance is the 25% retracement level
crossing at 91.51. Second resistance is the 10-day moving average crossing at 92.32. First support is Monday's low crossing at
87.14 then the 50% retracement level crossing at .8374.

January Henry natural gas closed higher on Wednesday as it consolidates some of this week's decline but remains below broken
support marked by September's low crossing at 7.561. The mid-range close sets the stage for a steady opening on Thursday.
Stochastics and the RSI are oversold but remain neutral to bearish 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 10-day moving average crossing at 7.545 would confirm that a short-term low has been posted. First resistance is the
10-day moving average crossing at 7.545 then the 20-day moving average crossing at 7.849. First support is Monday's low
crossing at 7.038 then weekly support crossing at 6.801.

GENERAL MARKET CONDITIONS

The Bank of England may come up with a surprise interest rate cut today while the European central bank is expected to continue with its neutral approach and is not expected to give any signals of an interest rate cut in the near future. We expect the Fed to cut discount rates by quarter of a percentage along with interest rates next week, which will start a new phase of US dollar bashing. If the Fed cuts discount rates by quarter of a percentage gold will easily edge past $850 and near $900 as long as $770 holds. Fed cuts will also be bullish for equities and base metals.

As far as base metals are concerned, their inability to edge higher has resulted in more shorts getting created than longs. 2008 is the year of interest rate cuts. Global most of the central banks apart from the Fed will cut interest rates whether in the first half or second half. Interest rate cuts will stimulate retail demand, which will be bullish for base metals. There are concerns that China may have a soft landing in 2008 which may not happen. The Olympics are in China next year. The German economy started picking up after the soccer world cup. Historically there are other instances as well. Chinese GDP is expected to grow over ten percent in 2008. Base metals demand is expected to remain firm and most of them will be able to near 2007 highs.

SILVER -- MARCH FUTURE

Silver needs to break $1474 for $1519. On the lower side as long as $1424 and $1392 are holding downside will be limited