Bullion intraday

Major Headline:

- Gold plunged below $900 an ounce for the first time in six weeks as mounting losses by banks in the subprime-mortgage market curbed investment in commodities. Silver also dropped.

- UBS AG reported an $11.9 billion loss in the first quarter, and Deutsche Bank AG will write down $3.9 billion in loans and asset-backed securities. The dollar jumped against the euro, and the Reuters/Jefferies CRB Index dropped for a third straight session.

- Gold reached a record $1,033.90 on March 17, while the euro, oil, corn and wheat climbed to all-time highs this year.

- Rising U.S. mortgage defaults have caused about $230 billion in credit losses and writedowns at financial companies worldwide.

- Wide price fluctuations in precious metals have reduced investor demand, some analysts said. The historical volatility of gold futures, or the rate at which a price moves up and down, was 42 percent in the past 10 days, compared with 15 percent a month earlier.

- Some investors may be selling gold to purchase equities after the Standard & Poor's 500 Index dropped 9.9 percent in the first quarter. U.S. shares rallied today.

- Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, has fallen 4.5 percent to 634 metric tons after reaching a record 663.8 tons on March 17.

US Economy:

- The Institute of Supply Management said that its index of U.S. manufacturing increased from 48.3 to 48.6 in March, better than expected, but still a sign of contraction.

- The U.S. Census Bureau said that construction spending was at an annual rate of $1.122 trillion in February, down .3% from January's pace and down 3.5% from a year ago. Private residential construction was down for the 24th consecutive month.

Currency Update:

- The unemployment rate in the Euro area (15) remained unchanged at 7.1% in February.

- Statistics Canada said that its index of industrial product prices was up .1% in February, but down .8% from a year ago.

- The Reserve Bank of Australia met and kept its interest rate unchanged at 7.25%, the highest rate in 12 years, even though they still expect inflation to remain high.

MCX Gold June

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 11570 Target 11680 and 11720 Stop loss 11535

MCX Silver May

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 21900 Target 22300 and 22500 Stop loss 21675

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