Lead supply deficit narrowed to 8 000 t in the first four months of 2008,

MCX Lead June traded negative following Lme movement, closed near 77.15 with minor gains, days low registered near 75.40 and day high registered at 78.50

Traders in China said some lead smelters in Yunnan province have cut production because of the drop in lead prices.

Lead refineries in the region of Shadian, which have an estimated annual output of 300,000-350,000 tons, have reduced production levels by about 40%, they said. The refineries process lead bullion into ingots, but the decline in prices to below $2,000/ton has wiped out their margins as they had bought the bullion when prices were much higher, said a Shanghai-based lead trader.

The lead supply deficit narrowed to 8 000 t in the first four months of 2008, compared a difference of 20 000 t in the same period of 2007, according to the ILZSG's preliminary data. Global lead mine production rose 5,9% year-on-year, to 1,2-million tons, mainly because of increased production in Bolivia and China.

World refined lead metal output was 1.,% higher, thanks to rises in Australia, Canada, China, India, Kazakhstan, and the Russian Federation. Germany and the Republic of Korea reported production declines.

World demand for refined lead metal nudged upwards by 0,7%, as increases in demand from Brazil, China, Italy, Japan and the Russian Federation marginally exceeded reductions in the Czech Republic, Germany, the Republic of Korea and Taiwan.

China’s net exports of refined lead metal during January to April 2008 amounted to 21 000 t, compared with 75 000 t over the same period in 2007.

Lead inventories at LME, increased by 4025 MT to 83325 MT.


MCX Lead June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.
Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 75.5 levels. If broken can see further fall to 73.9 and 72.4, If market holds above 77.0 further rally can be seen towards 78.6 and 80.1



Recommendations –MCX Lead June: Sell at 78 Target 76.5 and 75 SL 79.20


MCXARUN
9994500540

MCX Zinc under pressuer after release of ILZSG report

MCX Zinc traded bearish on Monday, market registered days low near 79.65, closed at 8035 with loss of 1% from previous closing. Intra day high registered near 82.

LME zinc have come under pressure after figures released by the International Lead and Zinc Study Group show a market surplus for zinc and a smaller deficit than the year before for lead, a London broker says. Momentum sellers have jumped on the bandwagon, adding pressure to LME lead.
The global zinc market was in surplus by 78 000 t during the first four months of this year, compared with an oversupply of 43 000 t during the same period of 2007, according to estimates from the International Lead and Zinc Study Group (ILZSG).

Mine output, which increased 9,2% year on year, to 3,8-million tons, was driven primarily by increases in Australia, Bolivia, China, Kazakhstan, Mexico, Peru and the US, the group said.

Lower refined zinc metal output in Finland, France, Mexico and Namibia was more than balanced by increases in India, Italy, Japan, the Republic of Korea, the Netherlands, Peru and the US, resulting in a rise in global production of 1,5%, to 3,76-million tons for the four months.

However, despite a sharp reduction in European demand of 7,5%, and falls in Japan and the Republic of Korea, global usage of refined zinc metal increased by 0,6%, mainly thanks to growth in demand from China.

China was a net importer of refined zinc metal over the first four months of 2008, with imports of 4 000 t, compared with net exports of 119 000 t over the first four months of 2007.

Prices for zinc, which is used to galvanise steel, have fallen 20% this year, as production levels outpace demand.

Zinc inventories at LME, decreased by 300 MT to 143975 MT.

MCX Zinc June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.
Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 79.3 levels. If broken can see further fall to 78.3 and 77.0, If market holds above 80.7 further rally can be seen towards 81.7 and 83.0


Recommendations- MCX Zinc June: Sell at 81 Target 79.50 and 78 SL 82.20

MCXARUN
9994500540

MCX Nickel extended its rally into another day

MCX Nickel trades positive following Lme movement, registered days high near 1049.50 but settled with minor loss at 1035, days low registered near 1020.

Nickel extended its rally into another day in Asia Monday, as the market continued to price in the four-month shutdown of BHP Billiton's Kalgoorlie smelter. Overall, though, sideways trading in the dollar and oil prices left base metals struggling for direction in a very quiet session.

UBS analyst John Reade said the rally has been driven by both fresh longs and short-covering, and could have more room to run in the short term.

Nickel inventories at LME, decreased by 132 MT to 46956 MT.

MCX Nickel June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.
Technical have turned neutral to bullish and market is expected to remain positive above 1050 levels. If sustain above this level can see a rally towards 1064 and 1079, If market sustains below 1035 can see a further fall towards 1020 and 1005

Recommendations: MCX Nickel June: Buy at 1030 Target 1050 and 1070 SL 1010

MCXARUN
9994500540

MCX Copper trading bullish on China import news.

MCX Copper June trades high following LME movement ,registered days high near 349.40 and closed at 345.60 with 1.84% gain from previous closing. Days low registered near 339.

Oil and dollar movements supported copper futures Monday along with bullish Chinese production data and indications of market tightness. Copper also got a boost on "the market's view that Chinese May industrial production data were positive. Indications of market tightness also boosted the red metal.

Inventories of copper stored in London Metal Exchange warehouses rose 875 metric tons Monday, leaving them at 122,050. The most recent Comex inventory data, released late Friday afternoon, were unchanged at 11,040 short tons.

China imported 420,000 metric tons of copper concentrate in May, up 13.7% from a year earlier, according to preliminary data issued by the General Administration of Customs Monday. The country imported a total of 2.29 million tons of copper concentrate in the first five months, up 21.6% on year, it added.

China's copper output in May rose 18% on year to 324,000 metric tons, the National Bureau of Statistics said Monday. Total output in the January-May period rose 19% to 1.49 million tons, it said.

Chile exported $2.86 billion worth of copper in May, falling 33% from $4.28 billion in the same month last year, the central bank reported Monday. In April, Chile exported $3.72 billion worth of the red metal, up 10.4% from $3.37 billion in April 2007. During the second half of April and the first week of May, state copper giant Corporacion Nacional del Cobre de Chile, or Codelco, shut down several of its divisions as a result of a contract workers strike. The state miner is the world's largest copper producer.


MCX Copper June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.
Technical have turned neutral to bullish and market is expected to remain positive above 350.3 levels. If sustain above this level can see a rally towards 355.1 and 360.7, If market sustains below 344.7 can see a further fall towards 339.9 and 334.3

Recommendations-MCX Copper June: Buy at 344.50-344 Target 348 and 352 SL 341.5

MCXARUN
9994500540

Crude Oil : Reverses from higher levels

Oil prices recorded a new all-time high of $139.89 a barrel in NYMEX yesterday, but subsequently backed away to close in the red as focus shifted back to the lower global demand estimates.



Crude oil July in NYMEX settled at $133.50 ($134.86) yesterday, after trading in the range $139.89 - $132.84.



Oil prices rose early in the day after a fire forced Norwegian oil company StatoilHydro to halt oil production at a North Sea platform.



The oil cartel OPEC in its latest monthly oil market report released on Friday cut its estimate for 2008 global oil demand to an increase of 1.1 million barrels a day, from an increase of 1.17 million barrels projected earlier. The total global oil consumption was revised to 86.88 million barrels a day from the previous estimate of 86.95 million barrels a day.



Reports that Saudi Arabia, the world’s biggest oil exporter, is considering increasing its output next month by about a half-million barrels a day to a production level of 10 million barrels a day also affected the market sentiments.



Earlier, the International Energy Agency lowered its forecast for average global oil product demand in 2008 to 86.8 million barrels a day, down 80,000 barrels a day from its previous estimate.



According to the latest energy-outlook report from the US Energy Information Administration, global oil consumption was up a lower than expected 630,000 barrels per day during the first quarter of 2008 compared with year-ago levels, against the expected growth by 1 million barrels a day.



But the US Energy Department’s weekly inventory report last week had revealed that the nation's crude supplies dropped 4.6 million barrels to 302.2 million barrels for the week ended June 6, taking the total fall in crude inventories to 23.6 million in four weeks.



The price of benchmark contract of crude oil in the New York Mercantile Exchange had soared over $10 to a new all-time high of $139.12 a barrel on June 6th , recording the biggest one-day gain in dollar terms, as geo-political tensions were ignited by Israel’s threats to strike on Iran over its nuclear programme.



Potential supply threats due to geo-political tensions and the Atlantic hurricane season and OPEC’s unwillingness to increase output despite high prices continue to underpin oil prices.



The Atlantic hurricane season officially began on June 1st. Arthur, the first Atlantic storm of the season, made landfall on Sunday near Mexico forcing the closure of two export terminals, but afterwards weakened to a tropical depression creating heavy rains in the Gulf of Mexico.



Repeated attacks on Nigerian oil facilities sustain concerns on supply from the oil–rich Niger Delta.



Meanwhile, Iran has cut its crude oil exports by 200,000 barrels a day since February 20 due to a seasonal fall in demand for crude oil during the refinery maintenance period. Iran is the world's fourth biggest oil exporter, currently producing around 4 million barrels a day, of which roughly 2.5 million barrels a day is exported.



DWTI (July) traded in the range $139.77 - $133.66 and closed at $135.34 ($135.47).



Weekly Outlook (NYMEX Crude oil July)

Resistances are $137, $138.14 and $139.14; supports $134, $132.35, $131.30. Expecting more weakness below $132.35.




TECHNICAL OUTLOOK (Intra-day)

DGCXCrude (July) - Bullish above 136.25; bearish below 135.72

MCXARUN
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DGCX Gold : Rises on weak Dollar

Gold prices rose yesterday as the dollar weakened against the major currencies cutting down the previous week’s gains.



International spot gold traded in the range $866.50 - $894.70 and last quoted at $881.30 ($870.20).



Dollar eased on profit booking, after a meeting of the Group of Eight finance ministers in Japan steered clear of the greenback's recent exchange-rate weakness issue and focused on the rise in commodity prices and the related economic risks.



The greenback had gained sharply last week supported by expectations of an interest rate hike amid rising inflation, and strong retail sales data from the US.



Data from the Labor Department showed a rise in US consumer prices at the fastest pace in six months, strengthening the growing expectations for a Federal Reserve interest-rate hike. As per the data, US consumer price index climbed 0.6% in May.



Last week, the US Commerce Department reported a 1 % rise in May retail sales, the biggest increase recorded since November, letting the US currency to add to this week’s sharp gains.



Comments from Federal Reserve Chairman Ben Bernanke last week regarding growing inflation fears, which hinted at a possible rate hike later this year, also helped the dollar to strengthen against the major currencies.



The recent data from various sectors in the US have given rather mixed hints regarding the economy.



A rise in pending home sales had also supported the dollar. The National Association of Realtors’ April pending home sales index, which is considered as a leading indicator of existing home sales, rose 6.3% in April.



But a report from the Labor Department highlighted the pressures on the US job market. According to the report, initial jobless claims in the US increased by 25,000 to 384,000 in the week ending June 7. The four-week average of initial claims rose 2,500 from the prior week to 371,500. Continuing unemployment claims also recorded a rise of 58,000, to 3.14 million for the week ending May 31, the highest level in more than four years. The four-week average of continuing claims rose by 16,500 to 3.09 million in the latest week.



Also the US trade deficit had widened 7.8% in April to a seasonally adjusted $60.9 billion from $56.5 billion in March, according to the report by US Commerce Department on Tuesday. The growing deficit was driven by a surge in crude oil imports, which eclipsed a significant gain in the nation’s exports.



The Bureau of Labor Statistics of the US Labor Department reported a more-than-expected rise in the unemployment rate in May to 5.5%, against the expected 5.1%. The total number of unemployed persons increased by 861,000 to 8.5 million in May, after seasonal adjustment, as per the government's Household Survey Data.



According to the data released by Commerce Department, real gross domestic product of the US increased at a 0.9% annual rate in the first three months of the year, slightly faster than the previous estimate of 0.6%.



Last day DGCX Gold Aug traded in the range $869.00 – $897.20 and closed at $885.90 ($873.70).



Weekly Outlook (Spot Gold)



Resistances are $874, $884, $890, $899; supports $856, $845. Some recovery is expected above $884.60. If trades below $858, spot gold may move towards $845.





DGCX Gold August

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 887; bearish below $ 882


MCXARUN
9994500540

Gold rebounded and silver jumped the most in three months

Gold rebounded and silver jumped the most in three months as the euro climbed against the dollar, boosting the appeal of the precious metals. Gold often moves in tandem with the euro, which rose as much as 0.9 percent.The euro is near the bottom of its recent range and any sharp rebound toward the top of the range could help gold's direction. Gold futures for August delivery rose $22, or 2.5 percent, to $895 an ounce in Comex. Gold have declined 2.9 percent last week. Silver futures for July delivery jumped 88 cents, or 5.2 percent, to $17.44 an ounce.

The dollar fell against the euro after a report showed NewYork state manufacturing contracted in June, reducing the chances the Federal Reserve would raise interest rates to damp inflation. The euro traded as high as $1.5518.

Gold has gained 6.8 percent this year and crude oil 44 percent. G8 finance ministers said over the weekend that surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy. The inflation rate in the euro area has risen to 3.7 percent, the highest since 1992.

The predominant concern is the inflationary effect that oil in particular and also food prices are having,'' U.K. Chancellor of the Exchequer Alistair Darling said June 14 after the G8 talks ended in Osaka, Japan. U.S. consumer prices advanced 0.6 percent in May, the most since November and faster than forecast, the Labor Department said June 13.

Speculative long positions, or bets prices will rise, outnumbered short positions by 151,248 contracts, the Washington- based commission said in its Commitments of Traders report. The net-long position was last this low in May and Gold rose from $864 the following day to $932.55 on May 21. The composition of the net long position is different, with fewer gross longs and crucially, fewer gross shorts. The reduction in the gross longs may be a further sign that gold is losing its attraction.


Currencies update:

Currency forecasters are betting that the dollar rally is just getting started as the Federal Reserve's shift to fighting inflation makes it likely to raise interest rates more aggressively than the European Central Bank. The currency will strengthen 2.5 percent to $1.50 per euro by year-end, according to the mean estimate of 39 firms surveyed by Bloomberg.

Economists anticipate that the ECB will raise rates a quarter-percentage point by September and then cut borrowing costs by yearend. Fed Chairman Ben S. Bernanke, who said he's ``attentive'' to the U.S. currency, will boost rates three-quarters of a percentage point by the end of the third quarter of 2009, according to data compiled by Bloomberg.


MCX Gold August

Technical Outlook: The daily stochastic have crossed over up which is a bullish indication. The stochastic 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.

Market is expected to remain positive and the resistance is seen at 12360 levels. If market breaches 12360 may see prices to take further upside towards 12430 and 12560 however if it holds back below 12360 may see prices to fall further on today. Major support is seen at 12270 and 12189


Recommendations–MCX Gold August: Sell at 12360 Target 12277,12210 Stoploss at 12460

MCX Silver July

Technical Outlook: The daily stochastic have crossed over down which is a bearish indication. The stochastic 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

Market is expected to remain positive and the resistance is seen at 24650 levels. If market breaches 24660 may see prices to take further upside towards 24850 and 25100 however if it holds back below 24600 may see prices to fall further on today. Major support is seen at 24400and 24200

Recommendations-MCX Silver July: Sell at 24660 Target 24430 and 24200 Stop loss at 24845


MCXARUN
9994500540

safe trade calls

GOLD


now good resist at 12425-450, for the day buy abv 12380 S/L 12360 and T/p 12420-450/towards 12600 OR sell below 12190 S/L 12215 and T/p 12145-150/ 12100/12050/close below test 11850-900 atleast/towards 12700 in coming days (any time close above 12440/ 12630/12875/13050/13330/ 13510 bullish while close below 11920/11775/ 11375/11200 bearish for medium term)


SILVER


book profit on buy abv 23675, for the day buy only abv 24450 S/L 24370 and T/p 24550/630/24800/close abv seen new rally OR buy ard 23680-700 S/L 23650 and T/p 23800-900/towards 24100 (any time close below 23275/ 23000-22875/22300/21575-500/20400/ 19250/18775 bearish rally while close above 24800/25500/26300/27700 bullish for medium term)


CRUDE


as long resistance of 5925 & 6000, down correction likely to continue. we book profit on buy abv 5850, for the day sell only below 5710 S/L 5740 and T/p 5670-5635/close below test 5490-5500 atleast/towards 5450 in coming days OR sell ard 5910-20 S/L 5925 and T/p 5880-5830, anytime close abv 6000 test 6125 atleast/upto 6200 (now crude need to close above 6000 for bullish rally while close below 5635/5440/5215/ 5100/4415/3890 bearish for medium term)


COPPER


we book profit on buy abv 338.5/342, for the day buy only abv 349.5 S/L 348 and T/p 350.5/352.5/abv uprally OR buy ard 339.5-339.8 S/L 339 and T/p 341-343 upto 345, only sustain below 339-334 & 332 down trend again (upside strong rally only on close above 352.5/361.5 while close below 339/330-326.5/310 bearish for medium term)


MCXARUN
9994500540

GENERAL MARKET CONDITIONS

As expected the US dollar resumed its slide on disappointing economic numbers. If the US economy does not perform then the Fed may continue with its stable interest rate regime which will always be US dollar negative. After the second week of July we will be in a better position to judge whether the US dollar will slide in the third quarter too. Meanwhile Lehman Brothers confirmed that they posted their first quarterly loss ever. Markets will be looking forward to results from other US financial services for a weekly direction on the US dollar apart from the PPI numbers. If these numbers disappoint then another round of US dollar selling will result.

The Indian commodity market is expected to grow by 30 percent and will reach Rs.74,156 billion ($1.73 trillion) in volume by 2010, according to a study by the Associated Chambers of Commerce and Industry of India (Assocham). Assocham found that the Indian commodity market expanded 50 times in a span of five years from Rs.665.3 billion in 2002 to Rs.33,753 billion in 2007 as people's participation in such trade continued to grow. It also noted that Indian commodity exchanges are still at a nascent stage of development as there are numerous bottlenecks hampering their growth. The turnover in proportion to GDP of commodity trade increased from 4.7 percent in 2004 to 20 percent in 2007 and is expected to go up many-fold since commodity markets would remain friendly to subscribers. Gold, silver and crude recorded the highest turnover in the Multi Commodity Exchange (MCX) while in National Commodity & Derivatives Exchange Ltd (NCDEX), soya oil, guar seed and soyabean and in NMCE pepper, rubber and raw jute were the most actively traded commodities on average. Indian investors need to diversify their investment in commodities and reduce their hunger for investing in equities.

GOLD -- AUGUST FUTURE

Gold will continue to trade in a wider $855-$930 range in the short term. At lower prices short selling reduces while over $910 short selling increases. A break out from this range is in the offing soon. We remain bullish on gold in the medium term with a price of $992 by December under the worst case scenario. But before $992 there is an outside chance of $800.

MCXARUN
9994500540