GENERAL MARKET CONDITIONS

The European central bank has shifted its focus from inflation to growth after it acknowledged that the Eurozone will be affected by a slowdown in the US economy. Bank of England and Fed interest rate cuts will only prevent investors from investing in equities. If the investor cannot invest in equities, bond yields are too low to invest as they do not cover inflation, real estate prices are volatile, emerging market equities provide cheap valuations at the current prices but are volatile, then where should he park his money? My answer is only commodities which include a balance between soft commodities, precious metals and base metals. If investment in commodities rises, gold will rise and will detach itself away from the movement in the currency markets.

Gold and silver will be volatile for the rest of the day. Silver and copper should outperform gold. Crude oil is finding buyers at higher levels. It remains to be seen whether traders will square off their positions over the weekend or go long. Base metals should rise further as there is a technical break out. Zinc, its better to remain on the sidelines as there are huge longs at higher levels and investors are also averaging at lower levels.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$898.0

As long gold holds $897 it will target $924 and $942 once again. Gold has to fall below $897 for further losses to $887 and $872.0

COPPER -- MARCH FUTURE -- INTRA DAY PIVOT: $336.60

As long as copper holds $336 it will target $360.50 and $372 in the short term. LME copper 3 months can rise to $7900 if it holds $7425.

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