bullion intraday

Gold and silver fell by yesterday as the euro pared gains that sent the currency to the highest ever against the dollar. The euro was little changed after climbing to a record $1.5913. The ECB kept its benchmark interest rate unchanged at 4 % yesterday and signaled growth is slowing in the 15 nations that share the currency

· South Africa, the world's second biggest precious metals producer, said mining output fell after a national power shortage triggered a slump in gold production by 7.3 percent in February, led by a decline in gold production. Gold output plunged 28.2 percent from a year earlier and non-gold output fell 3.2 percent

* Russia's foreign currency and gold reserves rose to a record $508 billion last week, and China has the world's biggest currency reserves, totaling $1.5 trillion at the end of last year, Japan has the second largest at $979 billion as of Feb. 29 according to Bloomberg data

· Demand for gold jewelry, the biggest use for the metal, has slumped by 25 percent since 2000 as prices more than doubled, according to GFMS. Jewelers have responded by using cheaper metals such as silver or more stones,



· In India, the largest gold jewelry market, designs typically contain 22 carats, In China, which overtook the U.S. as the second-biggest market for gold jewelry last year, most designs are 24 carats, Gold is so expensive that jewelers in Japan are offering designs with 5 carats of metal for the first time; the average content of the precious metal in jewelry is 18 carats with 24 carats being pure gold

US Economy

· The U.S. Census Bureau said that exports increased $3.0 billion to $151.4 billion in February while imports increased $6.4 billion to $213.7 billion. The result was $62.3 billion of net imports, more than expected.

· The U.S. Labor Department said that jobless claims were down 53,000 last week to 357,000.

Currency Update:

· The Bank of England reduced its interest rate from 5.25% to 5.00%, as expected. It was the second reduction this year. The June British pound is steady to higher.

· The European Central Bank met and kept its interest rate at 4.0%, as expected. President Trichet remains concerned about rising inflation.

· Statistics Canada said that exports were up 3.8% to C$39.3 billion in February while imports were down 2.0% to C$34.4 billion. The result was C$4.9 billion of net exports in February, more than expected



MCX Gold June

Technical Outlook: Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is Negative as the close remains below the 21-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations– MCX Gold June: Sell at 12030 Target 11950 and 11860 Stop loss at 12085



MCX Silver May

Technical Outlook: Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is Negative as the close remains below the 21-day EMA. The downside closing price reversal on the daily chart is somewhat negative.



Recommendations-MCX Silver May: Sell at 23330-60 Target 23160 and 22910 Stop loss at23500


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