Comex Gold

International spot gold traded in the range $926.40 - $948.50.

· U.S. stock futures took a turn for the worse Tuesday after the release of stronger-than-expected wholesale inflation data.

· The U.S. Labor Department said PPI rose 1% in January, and increased 0.4% when excluding food and energy. The median estimates of economists surveyed by IFR Markets were for a headline increase of 0.3% and core growth of 0.2%.

· Last month Eskom, the state power utility, cut all power for several days at some of the nation's largest mines. Since then the utility has allowed mines to use 90 percent of former power usage. That amount is forecast to remain for the next four years.

· Gold Fields said the power cuts will likely force it to suspend, scale back or close some of its South African functions. About 6,900 out of its total 53,000 person work force may be let go, the company said. Gold Fields said it was meeting with unions and other groups to find alternatives to layoffs, including early retirement voluntary retrenchments, contractor replacement and reassignment elsewhere within the company. The drop in production has cut into the world's supply, helping in part to boost precious metal prices.

· The euro rose by more than a cent towards its all-time high against the dollar after the closely watched Ifo survey of German business sentiment came in above market expectations, further reinforcing expectations that the European Central Bank will not cut rates any time soon. Earlier in the session, the euro had come under pressure on talk the Ifo would disappoint to the downside.

· The ECB has kept its key refi rate unchanged at 4.00 pct for eight months, unlike the Federal Reserve Board and the Bank of England, both of which are cutting rates, helping to underpin the euro.

· Durable goods are expected to drop 3.5 pct in January following a 5.2 pct increase in December. Durable goods excluding transportation are expected to have dropped by 0.7 pct in January following a 2.6 pct increase in the previous month.

Medium term outlook (Spot Gold)
Bullish above $916. Resistances are $926, $932, $947, $954, $973, $984; supports $896, $883. Expecting further up-trend above $954.60.

Last day DGCX Gold April traded in the range $929.40 - $951.00 and last quoted at $950.40 ($940.50).

TECHNICAL OUTLOOK (Intra-day)

GOLD (Apr) - Bullish above $ 947.30; bearish below $ 943.00

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