bullion intraday

Bullion
08 May 2008 09:37:41



Gold prices turned lower overnight as the US dollar took another forward step on the index, bolstered by inflation combat comments from K.C. Fed Pres. Thomas Hoenig and by credit crisis related observations from the Treasury's Henry Paulson. The greenback is approaching 60-day highs on the index and today's ECB meeting is expected to yield no change in interest rates.



Gold fell in London as the dollar rose against the euro, diminishing the metal's appeal as a hedge against declines in the U.S. currency. Platinum also slipped. Gold has moved in the opposite direction to the dollar this year, with the metal up 5 percent and the dollar down 6 percent against the euro and yen.



The range at the moment is between $850 and $880 with a firm break above this leading to higher prices.



Ukraine's foreign currency and gold reserves rose in April as the value of exports from the former Soviet republic increased. Reserves advanced 0.4 percent to $33.38 billion in April from $33.23 billion a month earlier, the country's central bank said yesterday



Switzerland's central bank may have increased gold sales 33 percent in April to 13 metric tons (417,960 ounces) compared with the prior month, Bullion holdings fell to 32.85 billion Swiss francs ($31billion) in April, from 33.27 billion francs a month earlier, Sales totaled 313,220 ounces (9.74 tons) in March, bringing the average since the end of September to about 11 tons a month



Silver use in industrial applications reached a record last year as overall demand fell and mine output rose, according to researcher GFMS Ltd.Industrial demand for silver use in electronics and in chemical catalysts rose 7.2 percent to 455.3 million ounces (14,200 metric tons) last year from 2006,



Total demand fell 2.1 percent to 894.5 million ounces in 2007, while mine production increased 3.6 percent to 670.6 million ounces. India, China and the U.S. accounted for 70 percent of the rise in industrial use of silver



Total jewelry demand fell 1.7 percent to 163.4 million ounces, the lowest since 1999, as wide price fluctuations discouraged purchases, the report said. Demand fell 8.5 percent to 25.8 million ounces in Italy, the second-biggest user of the metal for jewelry after Thailand, as consumer spending slowed



U.S. Economy:

The U.S. Labor Department said that worker productivity was up an annual rate of 2.2% in the first quarter, better than expected. Unit labor costs were up an annual rate of 2.2% in the first quarter, down from a 2.8% annual gain in the fourth quarter.

There is no encouragement for the housing industry here - the National Association of Realtors said that the pending home sales index was down 1.0% in March and down 20.1% from a year ago.

Currencies update:

Record high oil prices were seen reinforcing the European Central Bank's focus on inflation, which bank President Jean-Claude Trichet on Monday termed a "significant" risk. This underlined expectations that the ECB would keep rates at 4% when it meets on Thursday. Analysts expected the ECB to stick with its hawkish line on inflation in Trichet's post-meeting briefing on Thursday, despite a recent run of soft data.

AudUsd rose 0.37% to 0.9496, having retreated from a two-week high after the Reserve Bank of Australia held its key cash rate at a 12-year high of 7.25%.

MCX Gold June

Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 11675 levels. If market breaches 11675 may see prices to take further upside towards 11730 and 11800 however if it holds back below 11550 may see prices to fall further on today. Major support is seen at 11480 and 11425

Recommendations–MCX Gold June: Buy at 11545 Target11670 and 11720 Stoploss at11495



MCX Silver July

Technical Outlook: The daily stochastic have crossed over up which is a bullish indication. The stochastic indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 22716 levels. If market breaches 22716 may see prices to take further upside towards 22933 and 3140 however if it holds back below 22292 may see prices to fall further on today. Major support is seen at 22085 and 21868

Recommendations-MCX Silver July: Buy at 22410 Target 22610 and 22750 Stop loss at 22270

MCXARUN
9994500540