GENERAL MARKET CONDITIONS

In 2008 the trend so far in gold has been that gold rises multiple times faster than declining including last week. It seems equity investors are the most nervous lot as they increase their investment in gold and gold related instruments. Every now and then we hear comments on the progress of the global economy from some central banker, political leader, or big names in hedge fund industry. These comments are only creating uncertainty in the mindset of equity investors which is benefiting gold more than any other investment. Humans have two ears, two nose, two eyes, two hands, two legs and one big mouth. These guys are using only their big mouths instead of doing something positive to ensure that global financial markets stabilize. Unless the influential people stop using their big mouths global financial markets will be volatile and gold will benefit more than any other financial instrument.

Interest rate cuts will not create overnight growth. There is a time lag for interest rate cuts to have a trickle down effect which may vary from two months to six months. Equity investors need to be patient and remain invested in sector specific stocks and also look for stocks which offer cheap valuations. 2008 will provide a good long term investment opportunity in all markets including India. However returns will be lower than 2007 which investors have to realize.

It's interesting how weather has changed the outlook for base metals. Earlier traders and investors were going short in base metals on every rise and now the reverse is happening. Record Snowfall in China will result in greater demand for base metals, despite expectations of a global slowdown in 2008. China will need more copper and aluminum for electricity transmission and other areas. Factories which were closed due to snowfall will start and there will be greater short term demand for base metals than earlier expected in short term. Steel is still a great long term bull story. Copper, zinc, nickel and lead can rise in the short term and may in the next two to three months but the rise will be accompanied by a high degree of volatility.

The G7 has approved IMF gold sales, which could start as early as April, which is far off. This will not alter the medium term bullish in gold. In the short term gold can fall if some of the traders reduce their longs. This week gold will be volatile. The technical picture is still bullish in gold but will be vulnerable to sharp corrections. It's all about "pace" not just for the day for day traders but also for the medium term traders in gold and silver. "Pace" implies speed of rise or speed of decline in gold and silver. If one is able to determine the pace correctly, he will mint money.

GOLD -- APRIL FUTURE -- INTRA DAY PIVOT:$920.30

$924 price target achieved, gold now has to break $942 for $954 and $968. For the day gold has to fall below $916 for a move back to $904 and $897.0

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $90.20

Crude oil targets $94.56 and $99.77 as long as $89.90 holds.

MCXARUN
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