GENERAL MARKET CONDITIONS

“In the Nick of Time”, that’s all I can comment on the Fed rate cut of 0.75% yesterday. Global stock markets and commodity markets were reeling under expectations of a US recession and the subsequent sell off. The Fed rate cut will provide the much needed relief to investor. Markets now expect the Fed to cut interest rates by a further 0.50% next week. The European central bank and bank of England may also follow the Fed and cut interest rates next month, thereby adding more liquidity to the markets. Interest rate cuts imply more liquidity to the money markets which will result in a rise in speculative interest in commodities and higher commodity price inflation coupled with lower growth rates, which is nothing but stagflation. Gold performs best in stagflation.

However physical gold demand at higher prices is almost negligent as prices have risen too fast. However if the gold price stabilizes around $850 for a long time, physical demand will return to the market. For the time being its investment demand which will dictate gold, silver and other metal prices. The best intra day strategy is to book partial profits on your trades and instead of putting a stop loss, exit the market when prices near the stop loss levels.

COPPER -- MARCH FUTURE -- INTRA DAY PIVOT: $327.0

Copper managed to hold $301 and needs to break $331 and $339 for gains.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $90.40

Crude oil has to hold $87 else it will fall to $82. The direct relationship between crude oil and the US dollar will continue. Resistance at $90.20

MCXARUN
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