comex gold outlook

Gold prices resurfaced above $950 a Troy ounce, as the Dollar switched back to the selling mode. Recovery in oil prices also fuelled the bullion’s progress.



International spot gold traded in the range $934.30 - $954.20, and last quoted at $953.50 ($938.30).



Dollar extended losses after the release of fresh economic data added more pressure. On the other hand, the European currency was upbeat following robust data from the Euro-zone’s two biggest economies.



Germany's Ifo institute reported that business confidence in the Europe's biggest economy rose for a third consecutive month. Also, French business sentiment rose unexpectedly in March, reaching its highest level so far this year, according to national statistics office INSEE.



The US Commerce Department reported yesterday that sales of new homes in the US fell to a 13-year low in February, dropping 1.3% to a seasonally adjusted annual rate of 590,000.



US consumer confidence index had fallen in March to 64.5 from a revised reading of 76.4 in February, according to a US Conference Board release on Tuesday.



But the report from National Association of Realtors released on Monday had shown that resale of homes rose 2.9% to a seasonally adjusted annualized rate of 5.03 million. The rise was above expectations, and the first in seven months.



Gold had corrected from record high levels reached earlier last week, along with oil, as the Dollar bounced back moderately from record-low levels versus the Euro after the Federal Reserve cut its benchmark interest rate by 75 basis points to 2.25 percent.



The latest rate cut has been the sixth since last September, and has made the reduction in the federal funds rate to 300 basis points, to the lowest point since late 2004. But many market participants and analysts had anticipated an even more severe cut by the Fed, a full 100 basis points, amid serious concerns regarding a recession in US economy.



Crude oil for May delivery in NYMEX settled at $106.21 ($101.22) a barrel, after trading in the range $101.43 - $106.36.



The weekly update by US Energy Department’s Energy Information Administration said US crude stockpiles remained unchanged at 311.8 million barrels in the week ended March 21, while a rise of around 1.5 million barrels had been widely expected.



The Commerce Department had reported last week a drop in US housing starts in February by 0.6 percent to a 1.065 million unit annual rate, down from 1.071 million units in January.



The economic worries and a nose-diving dollar had propelled spot gold to record an all-time high of $1030.80 a Troy ounce last week.



The Federal Reserve in a an unexpected move had 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 by Fed boosted speculations regarding the possibilities for more casualties in the widening US financial crisis.



Meanwhile, the US Commerce Department reported 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 June traded in the range $939.30 – $956.90 and closed at $955.20 ($941.90).



DGCX Gold June

TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 954; bearish below $ 949

MCXARUN
9994500540

Safe trade calls

GOLD

now as long support 11875-825, expect some upside test 12175-275-400 in coming days.. buy at every deep. book profit on buy abv 12150-165, for the day buy abv 12360 S/L 12340 and T/p 12400 -425/towards 12550 in coming days OR buy ard 12135-40 S/L 12125 and T/p 12180-230/280 upto 12325 (any time close above 12375/13100/13400 bullish while close below 11830/11575-475/ 11300/10950-900/10500/10050/9850/ 9575 bearish for medium term)

SILVER

book profit on buy abv 22475-525, for the day buy only abv 23950 S/L 23860 and T/p 24050-100/24300-400 OR buy ard 23140-50 S/L 23100 and T/p 23350 upto 23550 (any time close below 22900/22100-21975/21250/ 20150/ 19390/18600-250/17850 bearish rally while close above 23950/26100/ 27500 bullish for medium term)

CRUDE

buy only abv 4240 S/L 4220 and T/p 4265-85/upto 4320 OR buy ard 4135-40 S/L 4130 and T/p 4180-4200 (now crude need to close above 4335/4460-85 for bullish rally while close below 4030/ 3960/3830/3585/3415-3390 bearish for medium term)

COPPER

buy only abv 331.5 S/L 330 and T/p 333 -335.5/upto 337.5 OR sell below 324.5-323 S/L 326 and T/p 322/319.5/318 upto 314.5 (upside strong rally only on close above 335.5/348/354 while close below 310.5-303/281/267.5/254.5/235 bearish for medium term)

MCXARUN
9994500540

long view

LEAD
LIKELY TO TEST 104.5 UPTO 101 WITH ANY BREAK & CLOSE BELOW 107..5, WHILE CLOSE ABOVE 113.5 & 129 SOME UPSIDE MORE(APRIL)


MCXARUN
9994500540

Bullion intraday

§ Gold rose for the second straight day inNew York as the dollar dropped against the euro. Silver also gained.

§ The euro climbed as much as 0.7 percent versus the dollar after jumping 1.5 percent yesterday. Gold reached a record $1,033.90 an ounce on March 17 as the euro traded at an all-time high of $1.5903.

§ The dollar fell against the euro today after reports showed German business confidence increased in March and orders forU.S. durable goods dropped in February, fueling speculation that interest rates in theU.S. may continue to drop while borrowing costs inEurope remain steady.

§ The Federal Reserve has cut theU.S. benchmark rate six times since September from 5.25 percent to 2.25 percent. The European Central Bank has kept its main lending rate at a six- year high of 4 percent since June.

§ Investment in Barclays Plc's iShares Silver Trust, the biggest exchange-traded fund backed by silver, has remained unchanged at a record 5,579 metric tons since March 18.

§ Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, is unchanged at 634 metric tons in the past two days. It reached a record 663.8 tons on March 17.

§ The U.S. Treasury, in a policy reversal, said yesterday it backed an IMF plan to sell some $98 billion in gold reserves to help make up for a decline in revenue. An advisory group recommended the sales be carried out within the quota set for annual gold sales by the Central Bank Gold Agreement, or CBGA. TheU.S. is the IMF's largest shareholder.

US Economy:

§ The U.S. Census Bureau said that new home sales were at an annual rate of 590,000 units in February, down 1.8% on the month and down 29.8% from a year ago. Even though sales were down, they were a little better than expected.

§ The U.S. Commerce Department said that durable goods orders were down 1.7% in February. Excluding transportation, orders were down 2.6%.

Currency Update:

§ The Ifo Institute's index of German business confidence increased from 104.1 to 104.8 in March, better than expected.

§ Eurostat said that its index of industrial new orders for the Euro area 15 was up 2.0% in January and up 7.3% from a year ago. The June euro is trading higher.

MCX Gold Apr (Daily Chart)



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 Gold April: Buy at 12245-30 Target 12320 and 12360 Stop loss 12210



MCX Silver May (Daily Chart)



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 Silver May: Buy at 23550 Target 23940 and 24160 stop loss 23415


MCXARUN
9994500540

outlook

June gold closed sharply higher for the second day in row on Wednesday as it consolidated some of the decline off last week's
high. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and
are turning neutral to bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average
crossing at 974.30 are needed to confirm that a short-term low has been posted. If June renews last week's decline, the 38%
retracement level crossing at 897.80 is the next downside target. First resistance is the 10-day moving average crossing at
969.60. Second resistance is the 20-day moving average crossing at 974.30. First support is last Thursday's low crossing at
909.00. Second support is the 38% retracement level crossing at 897.80.

May silver closed sharply higher for the second day in row on Wednesday as it consolidated some of last week's decline. The
high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and are turning
neutral to bullish signaling that a short-term low might be in or is near. Closes above the 20-day moving average crossing at
19.488 are needed to confirm that a short-term low has been posted. If May renews last week's decline, the 50% retracement
level crossing at 16.585 is the next downside target. First resistance is today's high crossing at 18.490 then the 25% retracement
level crossing at 19.015. First support is last Thursday's low crossing at 16.725 then the 50% retracement level crossing at
16.585.

May copper closed higher on Wednesday and above the 10-day moving average crossing at 371.73 signaling that a short-term
low has likely been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the
RSI have turned bullish hinting that sideways to higher prices are possible near-term. Closes above the 20-day moving average
crossing at 379.47 are needed to confirm that a low has been posted. If May renews last week's decline, the 50% retracement
level of the December-March rally crossing at 344.85 is the next downside target. First resistance is today's high crossing at
375.00. Second resistance is the 20-day moving average crossing at 379.47. First support is the 38% retracement level of the
December-March rally crossing at 358.50. Second support is the 50% retracement level crossing at 358.50.

May crude oil closed sharply higher on Wednesday and above the 10-day moving average crossing at 105.15 confirming that a
short-term low has been posted. Today's inventory report along with speculator buying underpinned today's rally. The high-
range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral hinting that
sideways to higher prices are possible near-term. If May extends today's rally, March's high crossing at 110.35 is the next
upside target. Closes below last Thursday's low crossing 98.65 would renew this month's decline and could lead to a test of the
38% retracement level of the 2007-2008- rally crossing at 94.17. First resistance is today's high crossing at 106.20. Second
resistance is March's high crossing at 110.35. First support is the 20-day moving average crossing at 104.13. Second support is
the 25% retracement level crossing at 99.77.

May Henry natural gas closed higher on Wednesday and above the 10-day moving average crossing at 9.589 confirming that a
short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and
the RSI have turned bullish signaling that sideways to higher prices are possible near-term. Closes below Monday's low
crossing at 9.089 would temper the near-term friendly outlook in the market. If April renews last week's decline, the 50%
retracement level of December-March rally crossing at 8.732 is the next downside target. First resistance is today's high
crossing at 9.749 then March's high crossing at 10.365. First support is last Monday's low crossing at 9.089. Second support is
the 50% retracement level of this year's rally crossing at 8.732.

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9994500540

GENERAL MARKET CONDITIONS

It’s back to the US dollar story for metals and energies. Metals and energies pared some of their last week’s losses on renewed US dollar woes. As long as the US dollar continues to weaken, metals and energies will remain firm. I am not surprised by US weak economic data. The effects of the Fed’s interest rate cuts will be felt only in the third quarter (after June), till then softness in the US economy will continue. Interest rate bets are also dictating the markets. If the US economy worsens further markets will start pricing in a more aggressive interest rate cut. Fed fund rates are at 2.25%. Under the worst case scenario Fed fund rates will fall back to 0.50% towards the close of the year. After the Fed finishes cutting interest rates what will happen to the US dollar?

Retail investors had invested in Indian equities in a big way in January (before the slide) and are using the current rise to exit stocks if their prices come. These investors are exiting stocks and investing in commodities. This will continue not just in India but also in other countries as stock markets remain volatile. Gold’s rise from $980 to $1032 resulted in shorts get squared off and fresh longs being created. Longs also got squared off when prices fell to $997 to near $900 due to lack of margin money. If such volatility happens in gold, even gold’s safe haven status will disappear and investors will sit on cash or invest in treasuries. Last week’s fall has scared off investors who have become short term traders.

SILVER -- MAY FUTURE

Silver targets $2000 -$2100 in short term as long as $1600-$1630 holds.

MCXARUN
9994500540