comex gold intraday

Gold prices rose sharply yesterday, along with a rally in oil prices to record high levels, as the dollar plunged against the major currencies and registering a new historic low against the euro.



International spot gold traded as high as $948.90 and last quoted at $944.70 ($928.00).



Data from the US Commerce Department showed that the housing starts dropped 11.9%, to a seasonally adjusted annual rate of 947,000 in March.



But on Tuesday, the US Labor Department reported that the wholesale prices had risen 1.1% in March, against the expectations for a 0.4 % increase; while the core producer price index, which excludes volatile food and energy, rose 0.2%. This had temporarily reduced the expectations of a further immediate cut in interest rates by the Fed.



In data from the US housing sector, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for April was unchanged at 20 as expected, but remained near the all-time low level.



Data from the US Commerce Department on Monday showed retail sales rose 0.2% in March, compared with economists' consensus expectation for a 0.1% decline.



Sentiments in the dollar remain dampened on sustained fears regarding the US Economy, after data showed US consumer confidence sunk to its lowest level in 26 years in early April, according to a report from University of Michigan/Reuters. The US consumer sentiment index fell to 63.2 in early April from 69.5 in March.



The initial jobless claims in the US fell 53,000 to 357,000 in the week ended April 5, as reported by the Labor Department last week. But the four-week average of initial claims rose by 2,500 to 378,250.



Also, continuing jobless claims rose 3,000 to 2.94 million, the highest since July 2004, for the week ending March 29. The four-week moving average of continuing jobless claims increased 36,500 to 2.9 million.



In a separate release, the US Commerce Department revealed the nation's trade deficit expanded unexpectedly by 5.7% to $62.3 billion in February.



As expected, the European Central Bank left the interest rates unchanged, while the Bank of England cut its benchmark interest rate by 25 basis points to 5 percent.



The International Monetary Fund (IMF) proposal to sell 403.3 metric tons of gold from its reserves, which is currently valued at more than $13 billion, weighed on the traders’ sentiments in the bullion.

The minutes from the Federal Open Market Committee meeting held in March gave a downbeat assessment of the US economy, leaving the possibility of further cuts in US interest rates intact. The minutes also showed that many board members believed a recession in the first half of 2008 was likely amid declining economic growth and financial market stress.

Crude oil May in NYMEX recorded a fresh all-time high of $115.14 a barrel and settled at $114.93 ($113.79).

Oil prices were propelled by supply concerns after a reported decline in Russia’s oil output for the first time in the decade. This was in addition to earlier reports of supply disruptions from Mexico, where bad weather forced the closure of four export terminals, and Nigeria.

The weekly inventory update from US Energy Department showed a surprise decline in the nation’s crude inventories. As per the report, US crude inventories fell by 2.3 million barrels to 313.7 million barrels during the week ended April 11.

OPEC Secretary General Abdullah al-Badri had over-ruled an immediate hike in the OPEC oil output. He also played down the chances that OPEC would hold an extraordinary meeting before its next scheduled gathering in September.

Medium term outlook (Spot Gold)

Weak below $952; supports are $928, $908, $888; resistances $969, $990.

Last day DGCX Gold June traded in the range $928.40 – $952.40 and closed at $947.80 ($931.00).


DGCX Gold June

TECHNICAL OUTLOOK (Intra-day)

GOLD (June) - Bullish above $ 946; bearish below $ 942

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energy intraday

Major Headlines:

· Crude oil Prices touched a record $114.95 after the report showed an unexpected decline in nationwide supplies by 2.36 million barrels to 313.7 million. Most of the drop occurred on the West Coast. Supplies at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is stored, rose 860,000 barrels to 18.4 million

· Gasoline for May delivery rose 3.66 cents, or 1.3 percent, to $2.9176 a gallon in New York. Futures touched $2.933 today, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.

· A slow-down in the U.S. economy has done little to temper enthusiasm for higher crude oil prices. Traders have seen numerous agencies lowered their demand forecasts for crude oil for 2008. That has given OPEC justification for stating numerous times that they will not raise production levels despite the historically high prices

· Crude oil and the euro versus the dollar have moved in lockstep in the past year. The correlation coefficient between the two was 0.957. A reading of 1 indicates they always move in the same direction. There has been a clear and positive correlation between oil and the euro against the dollar over the last couple of years.



· North Sea Oseberg crude oil fell to the lowest in almost three weeks relative to Dated Brent after shipping costs rose to a 16-month high, cutting demand.seberg's premium over the Dated Brent benchmark was at $2.65 a barrel today, compared with $2.75 yesterday, according to data compiled by Bloomberg



· Natural gas in New York gained on speculation a close above $10.30 per million British thermal units will spur further buying by technical traders. Yesterday was the second day in a week that gas rose above $10.30, the highest in more than two years and a level that's considered a buy signal by some traders who use charts and graphs to make their decisions. Prices have been gaining on a weakening dollar and increasing global demand for commodities





MCX Crude Oil April (Daily Chart)



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 Crude Oil April: Buy at 4465 Target 4510 and 4560 Stop loss 4410



MCX Natural gas April (Daily Chart)



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 414 Target 419 and 425 Stop loss at 408


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bullion intraday

Major Headlines:

· Gold rose to the highest in two weeks after the dollar dropped to a record against the euro Silver also gained. And gold Rises $16.30 To Close At $948.30 An Ounce On Comex The dollar is weaker, and that is helping out gold, The euro climbed to $1.5979 on speculation the European Central Bank will keep its benchmark-lending rate steady to curb inflation



· Gold will rebound to $1,000 an ounce this year, buoyed by a weaker dollar and it gained 35 percent in the past year, while the euro climbed 17 percent as the Federal Reserve slashed U.S. borrowing costs six times.



· Net speculative long positions in New York gold futures, or bets prices will rise, peaked this year at 212,259 contracts in February. Most recently they stood at 165,393 contracts, according to U.S. Commodity Trading Commission data



· Demand for commodities from hedge funds and other speculators has probably shifted to crude oil and bullions in the past few weeks



· Hochschild Mining Plc, Peru's second-largest silver producer, said first-quarter output advanced 68 percent and it's ``on track'' to meet a 2008 target. Production rose to 4.31 million ounces in January through March, from 2.56 million ounces a year earlier, Lima-based Hochschild said today in a statement. Gold output gained 3.3 percent to 44,060 ounces. The average realized price was $17.28 an ounce for silver and $933 an ounce for gold.



· China's National Bureau of Statistics said that real GDP was up 10.6% in the first quarter of 2008 from a year ago, better than expected. The People's Bank of China then increased the reserve requirement from 15.5% to 16.0%, the third increase this year. July copper is trading higher with buyers encouraged that demand from China will continue to stay strong.

US Economy:

· Merrill Lynch & Co. will report $6 billion to $8 billion in new write-downs when it releases financial results this week, bringing the total since October to more than $30 billion



· The dollar pared its loss against the euro after a report showed industrial production in the U.S. unexpectedly rose the most since November last month, helped by an increase at utilities and demand for business equipment.



· Fed Rate Outlook: Futures on the Chicago Board of Trade showed a 28 percent Chance that policy makers will reduce the fed funds target by a half-percentage point to 1.75 percent on April 30, compared with a 42 percent likelihood a week ago. The rest of the odds were for a reduction of a quarter-percentage point.

Currency Update:

· The European inflation rate accelerated to 3.6 percent last month, the highest in almost 16 years, The March figure is up from 3.3 percent in February and exceeds an estimate of 3.5 Percent published on March 31.



· European government notes pared losses after a U.S. government report showed housing starts fell more than forecast last month



· The U.S. currency had its biggest decline versus the euro in three weeks, dropping as low as $1.5969. The Canadian and Australian dollars and Norwegian krone increased after crude oil rose to a record of $114.95 a barrel. The euro touched 80.76 pence against the pound, the highest since the European currency's 1999 debut



MCX Gold June (Daily Chart)


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 Gold June: Buy at12115 Target12210 and 12290 Stoploss at12060



MCX Silver May (Daily Chart)



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 Silver May: Buy at 23610 Target 23850 and 24110 Stop loss at23440


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Technicals – MCX (Intra day calls)

CRUDE OIL (April) BULLISH ABOVE 4513BEARISH BELOW 4493



GOLD (June) BULLISH ABOVE 12154 BEARISH BELOW 12113



SILVER (May) BULLISH ABOVE 23680 BEARISH BELOW 23600



COPPER (APRIL) BULLISH ABOVE 346.60BEARISH BELOW 345.50



LEAD (April) BULLISH ABOVE 114.70 BEARISH BELOW 114.



NICKEL (April) BULLISH ABOVE 1195 BEARISH BELOW 1190



ZINC (April) BULLISH ABOVE 93 BEARISH BELOW 92.40

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outlook

June gold closed sharply higher on Wednesday and above last Friday's high crossing at 943.40 thereby renewing this month's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If June extends today's rally, the reaction high crossing at 960.30 is the next upside target. Closes below the reaction low crossing at 906.60 would confirm that a short-term top has been posted. First resistance is today's high crossing at 952.70. Second resistance is the reaction high crossing at 960.30. First support is the 10-day moving average crossing at 927.20. Second support is Monday's low crossing at 917.50.
May silver closed higher on Wednesday as it extends last week's trading range. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. Closes above last week's high crossing at 18.440 are needed to confirm that a short-term low has been posted. If May renews this spring's decline, the 62% retracement level crossing at 15.438 is the next downside target. First resistance is today's high crossing at 18.550 then the reaction high crossing at 18.685. First support is Monday's low crossing at 17.260 then the 50% retracement level crossing at 16.585.

May copper closed higher on Wednesday and above the 10-day moving average crossing at 392.21. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 383.81 are needed to confirm that a double top with March's high has been posted. Closes above March's high crossing at 402.40 could prove to be a bull trap due to the overbought condition of the market. First resistance is March's high crossing at 402.40. Second resistance is monthly resistance crossing at 416.00. First support is the 20-day moving average crossing at 383.81. Second support is the reaction low crossing at 370.90.

May crude oil posted a new all-time high on Wednesday as it extended this month's rally into uncharted territory. The high-
range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If May extends this month's rally into uncharted territory, upside targets will be hard to project. Closes below the 20-day moving average crossing 106.60 would confirm that a short-term top has been posted. First resistance is today's high crossing at 115.07. First support is the 10-day moving average crossing at 109.92. Second support is the 20-day moving average crossing at 106.61.
May heating oil posted a new high close on Wednesday as it extends this month's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near-term. This month's rally into uncharted territory makes upside targets hard to project. Closes below the 20-day moving average crossing at 303.83 would confirm that a short-term top has been posted. First resistance is today's high crossing at 331.00. Second resistance is last Thursday's high crossing at 332.04. First support is the 10-day moving average crossing at 314.92. Second support is the 20-day moving average crossing at 303.83.

May Henry natural gas closed higher on Wednesday and spiked above March's high crossing at 10.304 as it extended this week's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If April extends this month's rally, monthly resistance crossing at 11.505 is the next upside target. Closes below the 20-day moving average crossing at 9.748 would confirm that a double top with March's high has been posted. First resistance is today's high crossing at 10.489 then monthly resistance crossing at 11.505. First support is the 10-day moving average crossing at 9.896. Second support is the 20-day moving average crossing at 9.748.

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GENERAL MARKET CONDITIONS

It’s all about the US dollar in metals and energies. Metals and energies are being dictated by the movement in the US dollar and not by fundamentals. As long as the US dollar continues to fall metals and energies will trade with a firm bias. Crude oil prices are at $115.0 and could be headed for $125 if it is supported by a weaker US dollar. Year-on Year returns in crude oil is at 86.99% while gold, silver and natural gas have given over thirty percent returns. It’s natural for investors to invest more in these commodities without looking at the fundamental value. In the short term these committees will rise and give good returns in investors.

In 2009, I do not expect such higher returns in commodities to investors. Crude oil is at $115, will crude oil rise to $207 (80% of $115) by April 2009. I do not think so. If crude oil were to rise to $207 by April 2009, we could be nearing a global recession and not just a US lead recession. Central banks will run out of options to control inflation as interest rate cuts will not work. The rise in crude oil and the fall in the US dollar is temporary which can last another six to seven months (under the best case scenario). Day traders and jobbers can trade in either way. Long term investors need to be careful and should buy far dated put options as an hedge against a fall.

Base metals are being supported by falling LME inventories. If food prices continue to rise, the global savings rate will fall, and there will be less retail consumption. Less retail consumption will not be evident now but over the coming years. If a rise in prices of essentials outpace salary hikes, the axe will fall on non essential consumption and lower demand for base metals.

COPPER -- MAY FUTURE -- INTRA DAY PIVOT: $404.0

Back to square one. Copper has to break $404-$406 zone for $421 and failure to do the same will result in $382 once again.

NYMEX CRUDE OIL -- FUTURE -- INTRA DAY PIVOT: $112.20

Intra day as long as $112.50-$112.80 holds crude oil will target $117.10 and $119.60. Remain on the sidelines.

INDIAN RUPEE (USD/INR)

Falling US dollar and higher global stock markets will result in sellers at higher prices for the Indian rupee. Tomorrow banks are closed due to “Mahavir Jayanti” which could result in position squaring and rebuilding ahead of the long weekend. All eyes will be on the weekly inflation numbers. If inflation rises further, there will be pressure on the rupee to appreciate. Unless the rupee closes over 40.08, it will appreciate to 39.80 and 39.60 in short term.

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