GENERAL MARKET CONDITIONS

Gold and silver fell yesterday after Congressional leaders from both parties said they have agreed in principle to the emergency measure. The lawmakers said they would present their agreement to the White House in hopes of a vote within days. Under a set of principles endorsed by both parties, the the administration would be granted the full $700bn it sought, but with a first tranche of just $250bn and a further $100bn available without further congressional approval. Congress would get a chance to a vote on the remaining $350bn at a later date. The US Treasury was considering the proposals last night.

Washington Mutual Inc. may be seized by the US and parts sold to JPMorgan Chase & Co. in what will rank among the biggest banking failures in U.S. history. The Federal Deposit Insurance Corp. plans to take control of Seattle-based WaMu, the biggest U.S. savings and loan, according to the CNBC television network, and New York-based JPMorgan will buy deposits and branches, the Wall Street Journal said, without citing any sources. The FDIC insurance fund is not expected to contribute any money, the Journal said.

Our view on the above: Commodities will be volatile and if they are unable to break key technical resistances by next week they will fall sharply. Unless the US bail out package is confirmed gold, silver, copper and crude oil will not fall by much. Only volatility will rise. Once the US bail out package is announced, commodities will fall first and then rise.

COMEX COPPER DECEMBER

Intra day copper is bullish over $303 {LME (3 month) $6800} with $318 and $325 as the key resistance.

MCX NICKEL SEPTEMBER: Use a sell on rise strategy till nickel does not break 832-838 zone. Short term investors should buy nickel near to the 688-705 zone


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