Outlook : Bullion, Base Metals & Energy

Gold prices ended slightly lower after volatile trade yesterday.



The dollar edged higher supported by better-than-expected Retail Sales data from the US. According to the release by US Commerce Department, retail sales rose 0.3 % in January.



Reported decline in gold imports from India, the top consuming country influenced the price movement in bullion.



According to India's Bombay Bullion Association gold imports in January slumped to five tons from 62 tons a year earlier, as record high prices affected the demand for the yellow metal.



The Group of Seven industrial nations had approved on Saturday the sale of gold by the International Monetary Fund from April. The IMF is the third largest holder of gold reserves, after the Federal Reserve and Germany's Bundesbank.



International spot gold traded in the range $910.00 - $896.10 and last quoted at $ 904.70 ($905.70).



Oil prices settled above $93 a barrel as traders weighed the threat by Venezuela to halt oil supply to the US and a less-than-expected rise in US crude inventories, against the EIA’s downward revision of world oil demand estimate.



Venezuela's state oil company announced on Tuesday that it has stopped selling crude to Exxon Mobil Corp. and suspended commercial relations with the US-based oil giant. The President of Venezuela, Hugo Chavez had recently threatened to entirely cut supply to the United States.



The weekly inventory report by US Energy Department’s Energy Information Administration showed Crude oil inventories increased by 1.1 million barrels to 301.1 million barrels in the week ended Feb 8. However, an increase of about 2.5 million barrels had been widely expected.



In a monthly report released on Tuesday, the EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.



Also the EIA put forward a downward revision of the oil demand estimate, citing increased risks of a global economic slowdown in 2008. World oil consumption is expected to grow by 1.4 million barrels a day in 2008, about 200,000 barrels lower than last month's estimate.



Crude oil March in NYMEX traded in the range $91.90 - $93.89 and closed at $93.34 ($92.78).



Medium-term Outlook (Spot Gold)

Gold prices are expected to trade within the range $837 - $770. Breaking of either level may decide the direction. $801 may act as the major resistance followed by $824, $836, $850, $863, 872, $887, $900, $912, $915.40, $926. Supports are $754 and $744.

Last day, MCX gold April opened at 11562, traded in the range of 11624 – 11475 and closed at 11585.

Copper February in MCX opened at 308.50, traded in the range 309.70 – 303.00 and closed at 307.65.


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