Bullion intraday

* Newmont Mining Corp. said annual output at its Minera Yanacocha SRL unit, Latin America's largest gold mine, would remain ``stable'' at 1.8 million ounces for several years, a company spokesman said today
* Gold and silver had rallied for seven straight years as a weaker dollar and soaring commodity prices spurred demand for precious metals as a hedge against inflation. Last week, gold fell the most since 1990 after the Federal Reserve cut interest rates less than expected, boosting the dollar and triggering a sell-off in raw materials
* Gold is looking to the dollar for direction and bullion prices raised in New York on speculation the dollar's advance against the euro will stall
* China has issued rules allowing the nation's commercial banks to trade gold futures, and the Banks must meet a 8 percent capital adequacy ratio and possess derivatives and gold trading licenses to trade gold futures, the China Banking Regulatory Commission said in a statement posted on its Web site yesterday. The statement is dated March 7.
* Gold was also led lower by a decline in crude oil, reducing the appeal of bullion as a hedge against inflation. The UBS Bloomberg Constant Maturity Commodity Index fell 7.4 percent last week, the biggest drop since October 1997, when the data started. Still, the index is up 9.6 percent for the year
*
§ Gold declined after its biggest weekly drop for 25 years as a gain in the dollar eroded demand for alternative investments such as bullions fell and Dollar-denominated gold also tends to fall when the U.S currency gains as it becomes more expensive for holders of other currencies

US Economy:

§ US Fed's TAF to auction 50 bln usd for 28 days at minimum 2.19 pct, the US Federal Reserve will conduct the second of its expanded 50 bln usd auctions through its Term Auction Facility (TAF)

§ The Federal Housing Finance Board said Monday it has authorized federal home loan banks to increase their purchase of agency mortgage-backed securities (MBS), effective immediately. Pursuant to the resolution, the FHFB said the limit on federal home loan bank’s MBS investment authority would increase from 300% of capital to 600% of Capital for two years.



MCX Gold Apr (Daily Chart)



Technical Outlook: Momentum studies are bearish but are now 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 negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations - MCX Gold April: Buy at 11860 Target 11950 and 12030 Stop loss at 11790


MCX Silver May (Daily Chart)

Technical Outlook: Momentum studies are bearish but are now 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 negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations -MCX Silver May: Buy at 21755 Target 22050 and 22300 Stop loss 21610


MCXARUN
9994500540