outlook

June gold closed sharply lower on Tuesday due to a rising U.S. Dollar and the fading impacts of the sub prime credit crisis. Today's decline led to a close below the 38% retracement level of the August-March rally crossing at 897.80. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If June extends the decline off March's high, the 50% retracement level crossing at 854.30 is the next downside target. Closes above the 20-day moving average crossing at 963.70 are needed to confirm that a short-term low has been posted. First resistance is the 38% retracement level crossing at 897.80. Second resistance is the 10-day moving average crossing at 939.70. First support is today's low crossing at 876.30. Second support is the 50% retracement level crossing at 854.30.
May silver closed lower on Tuesday and spiked below the 50% retracement level of the August-March rally crossing at 16.585. A short covering rally tempered early losses and the mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are turning bearish again signaling that sideways to lower prices are possible near-term. If May extends this week's decline, the 62% retracement level crossing at 15.438 is the next downside target. Closes above the 20-day moving average crossing at 19.060 are needed to confirm that a short-term low has been posted. First resistance is the 38% retracement level crossing at 17.731 then the 10-day moving average crossing at 17.918. First support is today's low crossing at 16.300 then the 62% retracement level crossing at 15.438.

May copper closed lower on Tuesday due to profit taking as it consolidated some of last week's rally but remains above the 20-
day moving average crossing at 378.50. A short covering rally tempered early losses and the high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If May extends last week's rally, March's high crossing at 402.40 is the next upside target. Closes below the 10-day moving average crossing at 373.17 would signal that a short-term top has been posted. First resistance is last Friday's high crossing at 392.75. Second resistance is March's high crossing at 402.40. First support is the 20-day moving average crossing at 378.50. Second support is today's low crossing at 370.90.

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safe trade calls

GOLD

book profit on sell below 12210/11950 in April and sell below 11875-825 in june, for the day sell only below 11450 & more below 11400 S/L 11475 and T/p 11350-325/upto 11250 OR sell ard 11715-25 S/L 11730 and T/p 11675-11620 (any time close above 12175/ 12400/13100/13425 bullish while close below 11375/11000 bearish for medium term)

SILVER

price turn exact from our level 23415, book profit on sell below 22075, for the day sell below 21900 S/L 21990 and T/p 21800-700/upto 21575-550 where good support again OR sell ard 22360-375 S/L 22400 and T/p 22250/150 upto 21950 (any time close below 21325-250/20150/19390/18600-250/17850 bearish rally while close above 23425/ 24000/26100/27500 bullish for medium term)

CRUDE

book profit on sell below 4150/4010, for the day sell below 4000 S/L 4020 and T/p 3985-3960/3935/3910, sustain close below 3960 test 3925-3875 upto 3800 in coming days OR sell ard 4118-20 S/L 4125 and T/p 4100-4060 (now crude need to close above 4260-4315/4460-85 for bullish rally while close below 3960/ 3830/3585/3415-3390 bearish for medium term)

COPPER


book profit on sell below 333-332.5, for the day sell below 333 S/L 334 and T/p 331.75/330.5/328.5/327/sustain below test 324-23 atleast OR buy only abv 339 -340 S/L 338 and T/p 342-343.5/upto 347, sustain close abv 343.5 test 350-351 atleast & close abv 354 seen new rally (upside strong rally only on close above 343.5/354 while close below 327/ 310.5-303/281/267.5/254.5/235 bearish for medium term)

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comex gold intraday

Gold prices plummeted yesterday on selling pressure as the dollar gained strength against the major currencies.



International spot gold traded as low as $872.90 and last quoted at $883.10.



The Dollar’s advance was supported by Institute for Supply Management's manufacturing index that recorded an unexpected rise, to 48.6% in March from 48.3% in February.



The weakness in Euro following an unexpected slump in German retail sales and announcement of write-downs by two of Europe's largest banks also encouraged the sentiments in the greenback.



Swiss banking giant UBS and the Deutsche Bank disclosed a combined $23 billion of write-downs for the first quarter, ahead of their scheduled first-quarter earnings announcements. The move raised concerns about European exposure to the US sub-prime mortgage crisis.



According to preliminary data from the German Federal Statistics Office, retail sales slid by 1.6 percent in February compared with January, the largest drop in nine months, and by 0.3 percent on an annual basis.



As per the US Commerce Department release on Friday, inflation moderated in February, with consumer prices rising just 0.1% for the month.



The report from US Labor Department released on Thursday revealed that initial claims for state unemployment benefits fell 9,000 to 366,000 in the week ended March 22. However the four-week average of initial claims rose 1,750 to 358,000.



Also continuing claims for benefits fell 5,000, to 2.85 million for the week ended March 15. The four-week average of continuing claims rose 25,250 to 2.82 million.



The US economy grew at 0.6 % annual rate in the fourth quarter according to the Commerce Department estimate made public on Thursday. This was as per expectations and consistent with the two previous estimates, but the slowest pace since 2002.



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 $922.50– $878.00 and closed at $885.70.





DGCX Gold June

TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 886; bearish below $ 880

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energy intraday

Major Headline:

- Oil initially plunged below $100 on a firmer dollar, as investors sold commodities across the board on persistent fears U.S. demand will slow and as worries over Iraqi supply eased. But market bounced back above $101 on small short covering.

- The euro continued to slip against the dollar after figures earlier showed a slump in German retail sales, while market players awaited the release of the latest U.S. ISM manufacturing index this afternoon. A stronger dollar limited the appeal of dollar-priced commodities. Gold and base metals were also down.

- Meanwhile, a weekly U.S. report due tomorrow is expected to show gasoline demand fell and crude stocks rose.

- Iraq's southern oilfields will return to normal production volumes today after losing 150,000 barrels a day over the last three days because of power outages caused by clashes between the army and Shiite militants.

- Exports from the offshore Basra loading terminal in the Persian Gulf were unaffected by the output decline, an oil ministry official said today in a telephone interview from Baghdad. He declined to be identified for security reasons. Crude used for the 150,000 barrel-a-day Basra refinery, which was offline because of the power shortages caused by the fighting, was redirected for exports at the terminal, the official said.

- Fighting erupted in Basra last week between Iraqi forces and militants loyal to Shiite Muslim cleric Moqtada al-Sadr. Oil flows through a 100,000 barrel-a-day pipeline were disrupted on March 27 because of a damage caused by an explosive device. This pipeline will be repaired today, the official said, helping boost output.

- The two main pipelines in the network were unaffected by the explosion and fire. The system typically carries about 1.5 million barrels a day of Iraqi crude to the shipping terminal on the Persian Gulf.

- Iraq exported 80 percent of its oil to international markets from its southern Basra terminal in February, according to data from the Iraqi Oil Ministry's Web site. Basra oil exports averaged 1.54 million barrels a day last month, compared with 1.56 million barrels a day in January.

MCX Crude Oil 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 Crude Oil April: Sell at 4065 Target 3980 and 3920 Stop loss 4092

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 21-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations- MCX Natural Gas April: Buy at 394 Target 410 and 413 Stop loss 390

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Basemetals intraday

Major US Economic Data

- The Institute of Supply Management said that its index of U.S. manufacturing increased from 48.3 to 48.6 in March, better than expected, but still a sign of contraction. The June U.S. T-bonds are trading lower.

- The U.S. Census Bureau said that construction spending was at an annual rate of $1.122 trillion in February, down .3% from January's pace and down 3.5% from a year ago. Private residential construction was down for the 24th consecutive month. May lumber is steady to lower.

Major Headline:

- Copper fell in New York as rising Asian stockpiles signal slowing demand from China, the world's largest user of the metal.

- Copper declined in Asia on increased concern that a U.S.-led economic slowdown will crimp demand for the metal used in wires and pipes.

- Economists are expecting a report this week to show the U.S. lost jobs for a third straight month in March, adding to evidence the world's largest economy has slipped into a recession.

- Mitsubishi Materials Corp., Japan's third-largest copper producer, will increase monthly refined copper output by 12 percent in the first half of this fiscal year.

- Production will rise to 29,056 metric tons a month in April-September, compared with 25,998 tons a year earlier, the Tokyo-based company said in a statement today.

- Sumitomo Metal Mining Co., Japan's largest nickel producer, will boost production of the metal by 18 percent to 36,000 tons of refined nickel in the fiscal year starting today, compared with an estimated 30,500 tons last year, the Tokyo-based company said in a statement.

- Aluminum price forecasts for the next three years through 2010 were raised by Lehman Brothers Holdings Inc.'s equity-research analysts including Christopher LaFemina as energy costs rose. Prices will average $1.30 per pound in 2008, compared with an earlier forecast of $1.25, the analysts said in a report dated today. They will average $1.25 next year and 2010, from previous estimates of $1.18 and $1.12 respectively. Energy accounts for about a third of the total cost of aluminum production.

- Xinjiang Xinxin Mining Industry Co., China's second-largest producer of nickel, said 2007 profit rose 86 percent because of higher product prices Net income increased to 827 million yuan ($118 million), or 0.50 yuan a share, from 444 million yuan, or 0.32 yuan, a year earlier, the Xinjiang province-based company said in a Hong Kong exchange filing today. Nickel is used to make stainless steel.

- China, the world's largest steel producer, has posted economic growth of more than 10 percent a year since 2003, fueling demand for steel used in cars, buildings and appliances.The Asian nation may increase output of stainless steel by 23 percent this year, Macquarie Group Ltd. said March 27. Sales rose 82 percent to 1.58 billion yuan, the statement said. Nickel for cash delivery averaged $37,088.67 a ton in 2007 on the London Metal Exchange, 54 percent higher than the average $24,155.32 a ton in 2006


MCX Copper 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations - MCX Copper April: Buy at 334-333 Target 339 and 342 Stop loss at 327

MCX Zinc 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 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 April: Buy at 92 Target 94 and 96 Stop loss at 90.80MCX Zinc April: Buy at 92 Target 94 and 96 Stop loss at 90.80 are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The 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 negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

MCX Zinc April: Buy at 92 Target 94 and 96 Stop loss at 90.80

MCX Nickel 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 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 April: Sell at 1190 Target 1155 and 1135 Stop loss at 1218

MCX Lead 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 Lead April: Sell at 112.50 Target 109 and 107 Stop loss 113.65

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Bullion intraday

Major Headline:

- Gold plunged below $900 an ounce for the first time in six weeks as mounting losses by banks in the subprime-mortgage market curbed investment in commodities. Silver also dropped.

- UBS AG reported an $11.9 billion loss in the first quarter, and Deutsche Bank AG will write down $3.9 billion in loans and asset-backed securities. The dollar jumped against the euro, and the Reuters/Jefferies CRB Index dropped for a third straight session.

- Gold reached a record $1,033.90 on March 17, while the euro, oil, corn and wheat climbed to all-time highs this year.

- Rising U.S. mortgage defaults have caused about $230 billion in credit losses and writedowns at financial companies worldwide.

- Wide price fluctuations in precious metals have reduced investor demand, some analysts said. The historical volatility of gold futures, or the rate at which a price moves up and down, was 42 percent in the past 10 days, compared with 15 percent a month earlier.

- Some investors may be selling gold to purchase equities after the Standard & Poor's 500 Index dropped 9.9 percent in the first quarter. U.S. shares rallied today.

- Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, has fallen 4.5 percent to 634 metric tons after reaching a record 663.8 tons on March 17.

US Economy:

- The Institute of Supply Management said that its index of U.S. manufacturing increased from 48.3 to 48.6 in March, better than expected, but still a sign of contraction.

- The U.S. Census Bureau said that construction spending was at an annual rate of $1.122 trillion in February, down .3% from January's pace and down 3.5% from a year ago. Private residential construction was down for the 24th consecutive month.

Currency Update:

- The unemployment rate in the Euro area (15) remained unchanged at 7.1% in February.

- Statistics Canada said that its index of industrial product prices was up .1% in February, but down .8% from a year ago.

- The Reserve Bank of Australia met and kept its interest rate unchanged at 7.25%, the highest rate in 12 years, even though they still expect inflation to remain high.

MCX Gold June

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 11570 Target 11680 and 11720 Stop loss 11535

MCX Silver May

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 21900 Target 22300 and 22500 Stop loss 21675

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Technicals – MCX (Intra day calls)

CRUDE OIL (April) BULLISH ABOVE 4053 BEARISH BELOW 4037



GOLD (June) BULLISH ABOVE 11610 BEARISH BELOW 11572



SILVER (May) BULLISH ABOVE 21946 BEARISH BELOW 21855



COPPER (APRIL) BULLISH ABOVE 333.3 BEARISH BELOW 332.5



LEAD (April) BULLISH ABOVE 113.1 BEARISH BELOW 112.5



NICKEL (April) BULLISH ABOVE 1181 BEARISH BELOW 1174



ZINC (April) BULLISH ABOVE 92.2 BEARISH BELOW 91.80

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GENERAL MARKET CONDITIONS

A bad beginning to a hopefully another good quarter for gold and silver while base metals are consolidating at the moment. Energy prices continue to show no signs of a sustained fall. The fall in gold and silver are a part and parcel of a long term bull run rally and long term investors need not worry over their investments. In every market the speed of the fall is multiple times faster than the speed of the rise. The common denominator for the fall in commodity prices is the US dollar. The US dollar gained and commodity prices fell. Commodity prices will soon be delinked to swings in currency markets.

Gold and metals prices are bullish but will be very volatile in 2008 and over the coming years. Agro commodity prices will only rise as food security becomes a key issue for every country. Global population is on the rise. The lands which should have been used for growing crops are being used to expand cities or use it for bio fuels which give better returns. The overall area under food crop cultivation is falling every year. This will create severe supply shortages over the coming years with global warming adding to the woes. Take the case of rice, which is the stable food for almost everyone. Rice needs lot of water for cultivation, rice fields have to be water logged for days. Rainfall over the past few years has been skewed. Now a days it rains miserably for a few days. We get the whole months needed rain in a few days and thereafter rains are over. As a result rice and other crops production suffer. One needs to have a diversified portfolio between metals and soft commodities for better returns.

The Asian development bank has said that Asia’s growth rate in 2008 will be the lowest in the past five years. This puts a question mark over the Asian growth decoupling with US slowdown theory. Asian growth will be affected by the US economic slowdown and the decoupling theory may not work. It is for this reason that Asian stocks got hammered in the first quarter.

GOLD -- JUNE FUTURE

Long term bullishness is intact as long as gold floats over $828.30. In the short term gold will be volatile and will be looking to the US dollar for direction.

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