Bullion

Gold and other precious-metals futures have continued their correction lower as the U.S. dollar gained strength

· MCX Gold traded weak overall for the day and registered days low at Rs. 11306 per 10gram and bounced towards the level of 11380, market registered days high at Rs. 11490 per 10 gram.

· Similarly MCX Silver followed the yellow metal and registered days low at Rs. 21010 per kg and days high remain at Rs. 21436 per kg. Market was trading above Rs. 21150per kg.

· International spot gold registered days low at $884 and bounced towards $892 while silver registered days low at $16.25 and rebound towards 16.40

· Gold fell and platinum declined from a record inLondon on expectations the dollar's biggest rally against the euro in more than two weeks will erode demand for precious metals as an alternative toU.S. stocks and bonds.

· U.S. stocks fell for a second day after American service industries declined to the lowest levels since 2001, reinforcing speculation the economy has tipped into a recession.

· Early Tuesday, the ISM's measure of non-manufacturing activity fell by 12.5 index points to 41.9 in January from 54.4 in December. Economists surveyed by Thomson IFR Markets called for the index to fall to 53.0.

· The euro slipped further after a weak services sector PMI survey was followed by an equally dismal retail sales data in the single currency zone, raising concerns about growth prospects.

Indian Bullion Spot Market

Spot precious metals finished lower in domestic markets tracing the correction in international markets.

· In Mumbai markets, gold (995) diminished by Rs 110 to finish at Rs 11,405/10gm and gold (.999) by Rs 115 to finish at Rs 11,455/10g. Silver (.999) was down by Rs 15 to close at Rs.21,015/kg.

· Chennai gold (995) slipped by Rs 40 to finish at Rs 11,600/10gm and gold (.999) by Rs 60 to close at Rs 11,750/10gm respectively whereas Silver (.999) rose by Rs 150 to close at Rs 20,600/kg.

· Jaipur gold standard closed steady at Rs.11,600/10gm whereas Silver (.999) closed down by Rs 400 at Rs 20,400/kg.

· Ahmedabad gold (995) fell by Rs 110 to close at Rs 11,400/10gm and gold (.999) by Rs 110 Rs 11,450/10gm respectively whereas Silver (.999) was down by Rs 100 to close at Rs 21,100/kg.

· In Delhi bullion markets, gold (995) and gold (.999) declined by Rs 125 to close at Rs.11,525/10gm and Rs.11,575/10gm respectively whereas Silver (.999) ends at Rs.20,650/kg, down by Rs 150.

MCX Gold Apr

Technical Outlook:

Momentum studies are bearish but are not looking at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 at 11320/340 fro the target of 11390 and 11460 with stop loss at 11295



MCX Silver Mar

Technical Outlook:

Momentum studies are bearish but are not looking at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 20950-21000 for the target of 21190 and 21376 with stop loss at 20825

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