GENERAL MARKET CONDITIONS

The US dollar has gained against the euro and yen as markets fully factor a hundred percent chance of no rate cut in the end of June meeting. In June Eurozone and Asian growth will be the key for the US dollar as US growth is already discounted. If they falter and inflation zooms in these regions, the US dollar could pare some of its 2008 losses. Overall June will be a volatile month for the currency markets. Crude oil traders will be preparing for the upcoming US hurricane season. For the base metals Chinese demand will be the key. Zinc and Nickel can fall further in June if demand does not rise as much. For copper it’s better to remain on the sidelines.

If crude oil falls, gold and silver fall more. Whereas when crude oil rises, gold and silver do not rise as much. This is not a short term positive sign. Crude oil prices will be the key for gold and silver in the short term. If crude oil remains firm, gold will continue to find buyers on sharp dips. Gold June futures are expiring tomorrow. Traders and investors have started investing for June. In June spot gold will trade in a wider $850-$950 range. A break from the $850-$950 zone will be there if the US dollar and energy prices change track.

SILVER -- JULY FUTURE

Silver has to close over $1754 tomorrow else it will fall back to the $1696, $1606 zone.

NYMEX CRUDE OIL

As long as crude oil holds $124.80 downside will be limited and it will target $135 once again.

MCXARUN
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