Bullion intraday

· Gold slipped from record peaks as market participants sold the metal on news the US treasury is likely to approve the sale of gold from the International Monetary Fund.

· The US Treasury, in a significant policy shift, has decided it will support gold sales from the International Monetary Fund's reserves if they are part of a package of cost-cutting and other reforms of the way the international financial organization operates.

· Under Secretary for International Affairs David McCormick will lay out the details in a Washington speech later today. In a pre-address briefing for reporters, he said the Bush administration -- which had until now opposed selling IMF gold reserves -- would support a sale of the scale of roughly 8 pct of the IMF reserves or 12.9 mln ounces as part of a package of reforms which also included significant cost-cutting in IMF operations.

· The dollar stayed well bid, with talk of a rescue plan for troubled bond insurer Ambac Financial Group boosting sentiment, although attention is also starting to fall on the raft of US data and events this week.

· Fed chief Ben Bernanke's testimony to the US Congress will be a key event for the dollar and will shed more light on whether markets are pricing in too many more rate cuts in the world's biggest economy.

· The National Association of Realtors said that existing home sales were down .4% in January to an annual rate of 4.89 million units. The number of existing homes for sale represent 10.3 months of inventory.

· Johannesburg-based gold mining company Gold Fields Ltd. said Monday that it will be forced to scale back or close parts of its operations to achieve the 10% power reduction imposed by South African power supplier Eskom Holdings Ltd., which will further affect gold output.

· The company reiterated that as a result of the power cut, sustainable production at Gold Fields' South African operations is likely to decline by between 15% and 20% from the June quarter of 2008 onwards.



Indian Bullion Spot Market

Precious metals end with gains in spot markets tracing the record high touched in domestic futures market, on the back of a firming crude oil and expectations of yet another interest rate cut by the Federal Reserve.

· In Mumbai markets, gold (995) finished at Rs 12,265 per 10 gm and gold (.999) at Rs 12,320/10gm. Silver (.999) closed at Rs 22,735/kg.

· Ahmedabad gold (995) closed at Rs 12,250/10gm and gold (.999) at Rs 12,300/10gm whereas Silver (.999) closed at Rs 23,000/kg.

· In Delhi bullion markets, gold (995) closed at Rs 12,250/10gm and gold(.999) closed at Rs 12,330/10gm whereas Silver (.999) ends at Rs 22,470/kg.

MCX Gold Apr

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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Gold April: Buy only above 12010 for target of 12210 and 12330 with stop loss at 11920

MCX Silver Mar

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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Silver March: Buy at 22870 to 22900 for the target of 23300 and 23500 with stop loss at 22680

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