GENERAL MARKET CONDITIONS

Another workforce reduction news from the US economy as Starbucks says that it will close 600 U.S. coffee shops and eliminate as many as 12,000 jobs. The reductions amount to 7 percent of its workforce worldwide. The cuts include full- and part-time employees and will come over the next nine months. Such news only gives further evidence of the embedded slowdown in US economy. The recovery will not be at the same pace as may of us expect. However the US dollar will not get the same thrashing as we had in the first quarter.

Eurozone, UK and other nations are getting affected due to the continued rise in prices of essentials. Central banks in these regions may raise interest rates in the short term to control inflation but will reverse the same as higher interest rates affects consumption and growth. In the medium term the US dollar is headed for a showdown against the major currencies. The prime reason being shift in central bank focus and their preference on growth versus inflation. The US dollar will emerge a winner in the long term (8-12 months) while in the short term (2-3 months) the US dollar may loose.

Geopolitical uncertainties have resurfaced with fears that Israel may attack Iran’s nuclear installations before US president George Bush leaves his office in January. Crude oil and gold are rising over these uncertainties. The current situation is similar to 2006. In 2006 gold rose to $732 and fell to $546. Thereafter in July, 2006 we had the Iran-Hezbollah tension and gold once again rose to $692 only to fall to $560. If history will repeat itself remains to be seen. The difference between 2006 and 2008 is that of slowdown in global growth and energy prices.

PLATINUM OCTOBER -- INTRA DAY PIVOT $2055.0

As long as $2038 holds, platinum will target $2200+. In the short term.

MCX CARBON CREDIT --NOVEMBER (price in Indian Rupees)

Carbon Credit target 1508 was nearly achieved. For the day as long as 1488-1492 holds it will target 1534 and 1552.

MCXARUN
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