Gold outlook

Gold prices skyrocketed in early trade today, to record a fresh high of $1030.80 a Troy ounce, as the dollar tumbled after the Federal Reserve in a an unexpected move on Sunday night cut its discount rate for direct loans to banks by 0.25 percent point to 3.25 percent, and launched a new discount window facility for primary dealers, in desperate moves to stabilize financial markets.



The emergency moves deepened investors’ worries about the state of US economy, and boosted speculations regarding the possibilities for more casualties in the widening US financial crisis.



On Friday, international spot gold traded in the range $990.50 - $1007.10 and last quoted at $992.80.



Dollar was pulled down to a new all-time low versus the Euro. Adding to the pressure on the greenback, the consumer confidence in US recorded a drop. The University of Michigan/Reuters index tracking consumer sentiment dipped to 70.5 in March from 70.8 in February.



In a separate report, the US Labor Department said on Friday the consumer price index was flat in February against the expectations of a 0.2 % increase.



The US Commerce department reported a worse-than-expected 0.6 percent fall in the Retail Sales in February.



Another release by the US Labor Department showed the initial claims for state unemployment benefits remained unchanged at 353,000 in the week ended March 8. The four-week average of initial claims fell slightly in the latest week, down by 1,250 to 358,500.



Positive economic data from the Euro-zone, according to which industrial production posted a 0.9% rise in January and 3.8% rise annually, added to the strength of the European currency.



The Federal Reserve had announced new steps to boost liquidity in the banking system.



The Fed said it would increase the size of its emergency auctions by $40 billion, which means providing $100 billion to primary dealers in US Treasury debt. It also would start a series of term repurchase transactions with the primary dealers that trade securities directly with the Fed, expected to be worth a total of $100 billion.



Meanwhile, the US Commerce Department reported on Tuesday that the US trade deficit widened slightly in January, up 0.6% to $58.2 billion.



Medium term outlook (Spot Gold)

Bullish above $916; Resistances are $926, $932, $947, $954, $973, $984, $995, $1002, $1022, $1035, $1052; supports $896, $883. Further up-trend is expected above $954.60.



Last day DGCX Gold April traded in the range $991.90 – $1008.00 and closed at $1000.80 ($994.40).



TECHNICAL OUTLOOK (Intra-day)



GOLD (April) - Bullish above $ 1003.00; bearish below $ 998.00

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9994500540

Energy intraday

Major Headline:

· Oil futures' recent surge above $110 a barrel in large part reflects investors' scramble for protection against the falling dollar and stock markets.

· This craving for commodities is also leading more players on Wall Street to natural gas markets, where prices are up nearly 30 percent since the start of the year.

· With supply and demand in balance, natural gas prices, which are at their highest level since Hurricane Katrina knocked out key production facilities along theGulfCoast, seem to be moving more on outside factors.

· The run-up is a boon to natural-gas producers such as Anadarko Petroleum Corp. and Devon Energy Corp., but it's also forcing many of the nation's households to dig deeper to heat their homes and costing manufacturers more to run their plants.

· Higher prices also are driving up costs for fertilizer, plastics and a wide range of chemicals derived from natural gas. Transportation costs are up, too, due to soaring prices for gasoline, diesel and jet fuel refined from crude.

· While theMidwest and other parts of theU.S. have been hit by cold spells, utilities' inventories of this mostly domestic fuel remain abundant. Current supplies are about 4 percent above the five-year average for this time of year, according to government data.

· But demand is growing.U.S. natural-gas consumption grew 6.4 percent in 2007, and is expected to increase more modestly this year, the Energy Department forecasts.

· To be sure, a harsh winter requiring near-record withdrawals of natural gas from underground storage has played a part in the recent price spike. But what's really driving the flow of money into natural gas, and driving up the price, are an increasing number of "momentum players" flocking to energy commodities in general amid uncertainty in the stock market, said Larry Chorn, chief economist at Platts, the energy research arm of McGraw-Hill Cos.

· Average daily trading volume on Nymex in 2007 was nearly 29 percent higher than the year before, according to the Commodity Futures Trading Commission. And the average volume during the first two months of 2008 was 29 percent higher than the 2007 full-year average.

· The most recent jump in natural gas prices is expected to hold for a variety of reasons, including falling imports from Canada and growing demand from the power sector, said Calyon Securities analyst Carin Dehne Kiley.

· Natural gas futures typically were valued at about one-sixth the cost of oil futures during the previous two decades, said Skip Horvath, president and chief executive of the Natural Gas Supply Association. That ratio fluctuates, but based on where oil's now trading "it appears that gas is undervalued," Horvath said.

· Milder weather on the horizon here and inEurope could help ease the pressure on natural gas prices, analysts said, though it may not be enough to halt the demand on Wall Street for energy commodities, said Vince White,Devon's vice president of communications and investor relations.



MCX Crude Oil April

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Crude Oil April: Buy at 4365 Target 4420 and 4445 Stop loss 4335

MCX Natural gas April

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Natural Gas April: Buy at 403 Target 416 and 419 Stop loss 400.20

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9994500540

Basemetals intraday

MajorUS Data:

· The US Labor Department stated that consumer inflation moderated in February that may compel Federal Reserve to keep on cutting interest rates to bolster U.S. economy’s growth. The prices also fell as supply worries eased as an OK Tedi mine strike in Papau New Guinea ended Friday. The strike resulted in a loss of 1,628 mt of copper.

Major Headline:

· Copper rose as stockpiles monitored by the London Metal Exchange fell to the lowest in six months, spurring speculation supply will trail demand. Tin climbed to a record for a fourth consecutive day.

· Copper stockpiles slid 2,725 tons, or 2.1 percent, to 125,225 tons, the lowest since Aug. 23, the LME said. There will probably be ``a very substantial'' deficit in the first half of this year, Barclays Capital said.

· Though, the gains were restricted by increase in SHFE weekly copper inventories for another consecutive week. The copper prices dipped in line with weakness in the US, UK stock markets, later session’s ease in crude oil prices and following growing concerns about the weakening performance of the US economy.

· China's export growth may rebound after March, as factories shut during last month's snowstorms and Lunar New Year break resume production, Trade Minister Chen Deming said.

· China's industrial production grew at the slowest pace in more than a year in January and February as exports slowed, helping the government's effort to cool the world's fastest- growing major economy. China's economy, the world's fourth largest, grew 11.4 percent in 2007, the fastest pace in 13 years.

· The nation's investment demand has helped drive global prices of copper and iron ore to records. Inflation, already at the fastest monthly pace in 11 years in February, may overshoot the government's annual target of 4.8 percent.

· Producer prices, the cost of goods as they leave the factory, rose at the fastest pace in three years while retail sales surged the most in nine years, partly on rising prices. China's consumer price index soared 4.8 percent in 2007, compared with the 2.1 percent average in the previous four years.

LME Inventory update (14 March, 2008)

alumi 19275

copper -2725

nicke -132

lead 250

zinc 925


MCX Copper April

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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.

Recommendations:

MCX Copper April: Buy at 337 Target 343 and 349 Stop loss 334.50


MCX Zinc March

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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.

Recommendations:

MCX Zinc March: Buy at 105 Target 108 and 110 Stop loss 103.10


MCX Nickel March

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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.

Recommendations:

MCX Nickel March: Buy at 1300 Target 1328 and 1345 Stop loss 1289

MCX Lead Feb

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. 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.

Recommendations:

MCX Lead March: Buy at 124 Target 128 and 130 Stop loss 122.50

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Bullion intraday

· Gold surged to a record $1,009 an ounce in New York as the Bear Stearns Cos. bailout and a plunging dollar increased demand for the precious metal. Silver also gained.

· Gold futures for April delivery rose $5.70, or 0.6 percent, to $999.50 an ounce on the Comex division of the New York Mercantile Exchange. The price reached the highest ever for a most-active contract at 10:45 a.m., topping yesterday's record of $1,001.50. The metal has tripled in the past five years.

· Shares of Bear Stearns, the second-largest underwriter of U.S. mortgage bonds, plunged as much as 53 percent in New York Stock Exchange composite trading. The Fed earlier this week said it would lend banks $200 billion in exchange for mortgage-backed debt.

· The StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, began trading in November 2004 and reached a record 655 metric tons on March 10.

· Compared with government holdings, the ETF would rank eighth behind Japan, according to data from the producer-funded World Gold Council. The U.S. is the biggest holder with 8,133 metric tons, or 78 percent of its currency reserves, in gold.

· Still, high prices may discourage purchases by jewelers, the biggest buyers. Jewelry demand dropped 17 percent in the fourth quarter following a 15 percent gain in prices in the previous three months, data from the World Gold Council show. About 68 percent of gold demand last year came from jewelers.

· Imports by India, the world's biggest gold buyer, plunged 81 percent to 10.2 metric tons in February from a year earlier, according to the Bombay Bullion Association Ltd.

MCX Gold Apr

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Gold April: Buy at 12960 Target 13100 and 13160 Stop loss at 12915


MCX Silver May

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Silver May: Buy at 26640 Target 26950 and 27200 Stop loss 26410

MCXARUN
9994500540