bullion intraday

Bullion Apr 29, 2008



Major Headlines:

Gold may fall for a third straight week on speculation the Fed will slow the pace of U.S. interest-rate cuts, according to a survey by Bloomberg News. Gold's next move depends on this week's Federal Reserve meeting today and tomorrow, if they signal any pause in the U.S.interest rate cutting cycle that would put pressure on commodities as the dollar might strengthen

Gold climbed the most in eight days in London as crude oil rose to a record, boosting demand for the metal as a hedge against inflation n

The Fed policy makers are scheduled to meet on April 29-30 to discuss the economy and interest rates. Gold has gained 7.3 percent so far this year as central bankers have cut the overnight lending rate between banks by 2 percentage points to 2.25 percent.

India spot gold edged higher at close Monday on overseas leads amid moderate demand witnessed in the domestic market, trade participants said. In London, gold edged up on heightened inflation fears created by surging oil prices, but gains were capped by a recovery in the U.S. dollar, as investors await the outcome of the U.S. Federal Reserve's interest rate meeting



Gold advanced in New York as oil rose to a record, strengthening the appeal of the precious metal as hedge against inflation



Still, gold may fall for a third straight week on speculation the Federal Reserve will slow the pace of U.S.interest-rate cuts, eroding the appeal of the precious metal as an alternative to the dollar



Investment in the Street racks Gold Trust dropped to 591.19 metric tons on April 24, marking the first time the fund has fallen below 600 tons since November. The trust reached a record 663.8 tons on March 17



U.S. Economy:

The Federal Reserve meets today and Wednesday and may reduce the federal funds rate once again.

Non-farm payrolls, due from the Labor Department on May 2,fell by 78,000 in April and the jobless rate rose to 5.2 percent this month, according to separate Bloomberg surveys.



Currency Update:

The yen fell against the euro, Canadian dollar and Norwegian krone as rising commodity prices spurred investors to buy higher-yielding assets funded in Japan.



Bank of America recommended investors buy the euro at $1.5630 with a target of $1.6250 and sell the currency should it close below $1.5342 for two consecutive days. The second-largest U.S. bank has pushed back its forecast for the timing of an ECB interest-rate cut from September to October. The ECB's benchmark rate is 4 percent

The euro was supported after an industry report showed German consumer confidence unexpectedly increased to a seven-month high for May as rising incomes encouraged spending. ECB policy makers also suggested interest rates need to stay high to fight inflation.

MCX Gold June




Technical Outlook: 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.



Market is expected to remain negative and the support is seen at 11561 If market breaches below 11561 may see prices to take further correction towards 11506 and 11462 However if it holds back above 11660 may see prices to rise further on today. Major resistance is seen at 11704 and 11759



Recommendations–MCX Gold June: Sell at11680 Target11610 and 11560 Stoploss at11730




MCX Silver May



Technical Outlook: 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.



Market is expected to remain negative and the support is seen at 22249 If market breaches below 22249 may see prices to take further correction towards 22033 and 21846 However if it holds back above 22652 may see prices to rise further on today. Major resistance is seen at 22839 and 23055





Recommendations-MCX Silver May: Sell at 22690 Target 22350 and 22150 Stop loss at 22860


MCXARUN
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