Bullion

MCX Gold Feb prices on Tuesday pierced through the ceiling to reach its new peak of Rs 11,056 per ten gram on the bullion market due to aggressive buying by jewellers in line with a firming global trend. Buying was more of a speculative nature as some of the stockists enlarged their positions in future trading, while some purchases by jewellery fabricators also supported the trend.

· The metal last reached an all-time high in New York in 1980, when the dollar was weakening, oil prices were rising and the U.S. and Iran were at loggerheads. U.S. warships were confronted by Iranian ``fast boats'' in the Straits of Hormuz on Jan. 6, the U.S. Defense Department said yesterday. The straits are the sea route for about a quarter of the world's oil. The dollar fell today against 15 of 16 major currencies.

· The Shanghai Futures Exchange, China's biggest commodity bourse by value, set a reference price equivalent to 209.99 yuan a gram ($898 an ounce) for the gold futures contracts for delivery from June to December that start trading tomorrow, the exchange said in a notice posted on its Web site today.

· US homebuyers in November signed fewer contracts to buy previously owned homes than they did in October, ending a two-month streak of increased pending home sales.

Indian Bullion Spot Market

Gold and Silver prices skyrocketed in spot markets tracing the sharp gains in international markets as well as a weak dollar. Meanwhile oil traded firm at around $96 per barrel.


MCX Gold Feb (Daily Chart)



Technical Outlook:

Momentum studies are still 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 moving average. The downside closing price reversal on the daily chart is somewhat negative. The 9-day RSI over 70 indicates the market is approaching overbought levels. It is a mildly bearish indicator.

Recommendations:

MCX Gold Feb: Buy at 10980-11000 for the target of 11090 and 11140 with stop loss at 10955



MCX Silver Mar (Daily Chart)

Technical Outlook:

Momentum studies are still 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 moving average. The downside closing price reversal on the daily chart is somewhat negative. The 9-day RSI over 70 indicates the market is approaching overbought levels. It is a mildly bearish indicator.

Recommendations:

MCX Silver March: Buy at 20100-20080 for the target of 20280 and 20360 with stop loss at 19980

MCXARUN
9994500540