GENERAL MARKET CONDITIONS

Consumer confidence in US, European and other parts of the world is falling. What does this signify for the US dollar? Unless energy prices fall the US dollar will be volatile against the major currencies. Central banks are being forced to raise interest rates to tackle inflation. Consumers are spending more on essentials and less on other things. Lay off or its expectation is adding to the woes of the consumer. Consumer pessimism is bound to stay afloat. In the end it will all boil down to interest rates differential apart from growth outlook. We expect eurozone growth to fall in time and that the European central bank may not raise interest rates after July. The US dollar will make and slow and steady gains as we near US presidential elections.

The current investment market is a difficult one not just for the fund managers but also for the investors. Since 2003 retail investors have made quick bucks in stock markets and their capital was intact. One of my friends had married in the month of January. He had invested nearly all his savings after his marriage into the Indian stock markets. At present his mark to market (MTM) loss is nearly fifty percent. He is a worried man and asked me whether he will get his capital back on his delivery based equity investments. India is great for long term investments. The current fall is part and parcel of a long term bull rally which has been accentuated by political risk due to general elections anytime before May next year and the oil shock. In 2009 higher base effect will result in Indian inflation as well as global inflation falling to acceptable levels. A new government will be leading India. There should be interest rate cuts either in the second quarter of 2009 or in the third quarter of 2009 in India which should result in Indian stock markets going berserk once again after June, 2009. One needs to have the patience and remain invested. Had my friend diversified, his investment dilemma would have reduced. Precious metal investing is one of the best forms of diversification.

PLATINUM OCTOBER -- INTRA DAY PIVOT $2055.0

In the short term platinum can fall to $1980 and thereafter target $2100 and $2192 as long as $2038 and $2019 holds

MCX CARBON CREDIT --NOVEMBER (price in Indian Rupees)

Carbon Credit has to hold 1425 to be in bullish zone. Resistance at 1459-1465.

MCXARUN
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zinc intraday

MCx Zinc trades bearish following LME
25 June 2008 09:43:30

MCX Zinc June dropped to a low of 80.55 and closed at 80.80 with loss of almost 2%. Heavy increase in inventory supported the move most. Intra day high registered near 82.70

Zinc inventories at LME, decreased by 1025 MT to 150025 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 80.0 levels. If broken can see further fall to 79.2 and 77.9, If market holds above 81.4 further rally can be seen towards 82.2 and 83.5

Recommendations- MCX Zinc June: Sell at 81.20-81.30 Target 80 and 79.60 SL 82.10

MCXARUN
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lead intraday

MCX Lead drops on heavy stokc at LME
25 June 2008 09:42:42

MCX Lead dropped to a low of 79.75 on heavy increase in inventories at LME. Lead June closed at 77.85 with loss of 2.06%, Intra day high registered near 79.75

Lead inventories at LME, increased by 1100 MT to 96750 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 77.1 levels. If broken can see further fall to 76.3 and 74.9, If market holds above 78.4 further rally can be seen towards 79.2 and 80.6

Recommendations –MCX Lead June: Sell at 78.10-78.30 Target 77 and 76.40 SL 79.10

MCXARUN
9994500540

nickel intraday

MCX Nickel traded negative following international market, registered days low near 922, closed at 924.50 with loss of approx 2%. Intra day high registered near 949.Increase in inventory at LME also supported the move.

Nickel inventories at LME, decreased by 438 MT to 46296 MT.

MCX Nickel 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 915 levels. If broken can see further fall to 905 and 888 , If market holds above 932 further rally can be seen towards 942 and 959


Recommendations: MCX Nickel June: Sell at 930-935 Target 920 and 914 SL 942

MCXARUN
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copper intraday

MCX Copper dropped to a low of 356.30 following LME and energy movement, slight increase in stock at Lme also supported the move. Copper June closed near 357 with loss of Rs. 3.05 per kg, intra day high registered near 360.45

Copper futures eased Tuesday in a market concerned about demand due to a slowing economy, with some liquidation occurring after resistance held at the highs from the last five weeks or so.

But most also described the market as subdued as traders await the outcome of a two-day meeting of the Federal Open Market Committee that ends after the copper market closes on Wednesday.

A market "increasingly worried" about poor demand from the U.S. spreading to other nations probably led to lower copper prices despite a softer tone in the dollar that often underpins commodities such as copper, he continued.

The Conference Board said the June confidence index fell to 50.4 from 58.1 in May. This comes after weak German business-sentiment and euro-zone manufacturing data on Monday.

The metal came into the session softer even ahead of the U.S. data, with other observers also citing some worries about Chinese demand as well as chart-based selling.

Traders will have several U.S. reports to digest Wednesday while awaiting a post-meeting statement from the Federal Open Market Committee, May durable-goods orders, May new-home sales, weekly energy inventory data, which affects crude oil and sometimes spills over into metals

Inventories of copper stored in London Metal Exchange warehouses rose 25 metric tons Tuesday, leaving them at 123,150. The most recent Comex inventory data, released late Monday afternoon, were steady at 11,040 short tons.

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 359.5 levels. If sustain above this level can see a rally towards 362.1 and 363.7, If market sustains below 357.9 can see a further fall towards 355.4 and 353.8

Recommendations-MCX Copper June: Sell at 358.50-359 Target 355 and 353 SL 361.20

MCXARUN
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crude intraday

Crude oil rose for a third day as the U.S. dollar dropped, enhancing the appeal of commodities as an inflation hedge, and OPEC's secretary-general said the group won't increase production. OPEC members besides Saudi Arabia have no intention of raising output to bring down near-record prices, Abdullah El- Badri said in Brussels yesterday.

Another support for prices came from new sanctions against Iran approved by European Union nations, imposing additional financial and travel restrictions on a list of Iranian companies and experts including the country's largest bank. The 27-nation bloc stopped short of banning oil and gas exports from Iran, OPEC's second-largest producer, in response to its nuclear program plans.

World Bank President Robert Zoellick said record oil prices would ease if non-OPEC producer nations increase production. You haven't had much expansion of supply, and non-OPEC producers actually have come down a little bit in past years,'' Zoellick told reporters in Cancun, Mexico, at a gathering of North American, Latin American and Caribbean finance ministers.

Nigeria's senior white-collar oil workers' union continued a strike against Chevron Corp.'s local unit for a second day, stopping short of disrupting crude production, a union official said.

Elsewhere in Nigeria, attacks in the past week shut a Chevron pipeline located more than 200 miles southeast of the company's headquarters outside of Lagos as well as the offshore Bonga oil field operated by a Royal Dutch Shell Plc venture. The Movement for the Emancipation of the Niger Delta, or MEND, claimed responsibility for the Bonga attack, the militant group declared a cease-fire effective yesterday.

Natural gas futures slipped Tuesday, driven lower by profit-taking amid mixed weather forecasts and no signs of storm activity in the Atlantic. Weather forecasts for the major gas-consuming regions were mixed. Although some forecasters were predicting above-normal temperatures in the Northeast and Mid-Atlantic next week, the hotter weather may not be enough to spark significant cooling demand. Meanwhile, the National Hurricane Center was predicting no storm activity in The Atlantic over the next 48 hours.

MCX Crude Oil July - 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.

Technicals have turned neutral to bullish and market is expected to remain positive above 5929 level. If sustain above this level can see a rally towards 5997 and 6050 If market sustains below 5875 can see a further fall towards 5806 and 5753

Recommendations-MCX Crude Oil July: Buy at 5790 Target 5865 and 5920 Stoploss 5742

MCX Natural gas July - 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.

Technicals are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 557 if broken can see further fall to 552 and 547 If market holds above 565 further rally can be seen towards 572 and 581


Recommendations-MCX Natural Gas July: Buy at 554 Target 560 and 567 Stop loss at 549

MCXARUN
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bullion intraday

Gold rebounded on speculation the Federal Reserve is unlikely to raise U.S. borrowing costs anytime soon, weakening the dollar and boosting the appeal of the metal as an alternative investment. Silver also gained

The metal has gained 6.7 percent this year as the dollar has lost 6.2 percent against the euro. Oil rose, trading within 2 percent of the record $139.89 a barrel reached June 16 and adding to concern that inflation will accelerate.

Gold held by SPDR Gold Trust rose 12.26 tons, or 2 percent, to 628.21 tons on June 23, according to the SPDR Gold shares. The holding is at the highest since April 22. Jersey-based ETF Securities Ltd. also said its funds linked to gold and platinum have raised in the past week.ETFS Physical Gold added $44 million last week; ETFS Physical Platinum attracted $32 million last week.

Silver prices have tracked gold prices closely and while Barclays Capital expects this to broadly continue, weak fundamentals will expose it to additional downside risk on any dips in the gold Price." In contrast to gold, the largest silver ETF, Barclay’s i-shares, recorded a hefty redemption of 46 tons, down 1% Monday, the second largest daily outflow in a week, Barclays says. Total holdings have fallen to their lowest level in six weeks at 5,972 tons

Gold prices are expected to trade in a range-bound manner over the forthcoming weeks as the key external drivers (dollar, oil) hang in the balance, while mine supply remains constrained, jewelry demand in price-sensitive countries has fallen sharply. In the near term, the focus will be on the FOMC decision today. However, some economic data before then is likely to put some modest downward pressure on the USD and in turn should underpin gold prices

The Euro system’s reserves of gold and gold receivables decreased EUR26 million to EUR209.376 billion in the week ended June 20, the European Central Bank said Tuesday


U.S.Economy:

The S&P/Case-Shiller index of U.S. home prices in 20 cities was down 1.4% in April and down 15.3% from a year ago, roughly as expected. It was also the biggest annual drop since records began in 2000.

The Conference Board's index of consumer confidence fell from 58.1 to 50.4 in June, weaker than expected, The Richmond Federal Reserve's index of manufacturing fell from -3 to -12 in June, also weaker than expected.

The Federal Reserve begins its two-day meeting today and is expected to keep the federal funds rate unchanged at 2.0% tomorrow when the meeting concludes.


Currencies update:

India's central bank raised interest rates for the second time this month and asked lenders to set aside more money as reserves to cool inflation running at a 13- year high. The repurchase rate was lifted to 8.5 percent from 8 percent and the cash reserve ratio to 8.75 percent from 8.25 percent

The dollar has gained 1.5 percent against the euro this quarter as traders bet the economic slowdown sparked by the collapse of the sub prime-mortgage market will spread to Europe as the U.S. recovers. For the year, the dollar is down 6.2 percent.

Norway's krone rose to two-week highs against the dollar and euro on speculation the central bank may signal the need for further interest-rate increases, boosting the appeal of the nation's higher-yielding assets. The currency of the world's fifth-largest crude supplier gained as oil, which climbed to a record on June 16, advanced for a third day.



MCX Gold June - 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.

Technicals are neutral to bearish signaling sideways to lower prices in the near term. Initial support for the market is around 12280 levels. if broken can see further fall to 12209 and 12133 If market holds above 12376 further rally can be seen towards 12429 and 12503

Recommendations–MCX Gold Aug: Sell at 12405 Target 12320 and 12210 Stoploss at 12452

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.

Technicals are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 23490 levels. if broken can see further fall to 23356 and 23125 If market holds above 23714 further rally can be seen towards 23841 and 24072

Recommendations-MCX Silver July: sell at 23715 Target 23600 and 23420 stoploss at 23870

MCXARUN
9994500540