Gold Intraday Outlook

U.S. gold futures ended lower after trading in a tight range yesterday as bullion investors looked for a new catalyst from markets outside of the commodities sector to fuel the metal's recent rally amid inflation concerns. But down side was limited due to the dollar weakness. August futures did not fall further as the dollar hit a five-week low against major currencies after strong earnings from JP Morgan tarnished the U.S. currency's safe haven appeal.

But According to the report from U.S. Labour Department, jobless claims were down 47,000 last week to 522,000, the lowest since the first week of 2009. The big drop may have been distorted by unusual activity in the auto industry.

The Philadelphia Federal Reserve's regional index of manufacturing fell from -2.2 to -7.5 in July, weaker than expected.

On Wednesday, Gold rose to a two-week high above $940 an ounce as the dollar tumbled after data showed U.S. consumer prices rose faster than expected in June.

According to the U.S. Labour Department, consumer prices were up 0.7% in June, but down 1.4% from a year ago.

Weekly Outlook (DG. Aug.)

Expected trading range $903 – $920 .Breaking either side may clear the direction. Supports are $934, $948.Supports are $884 $864.

Last day DGCX Gold Aug Traded in the range $939.70-$932.90 and closed at $ 936.90

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 938 bearish below $932


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Crude Intraday Outlook

U.S. crude oil futures ended lower for the fourth day in a row on Monday as economic concerns reflected in dismal jobs data, tepid demand and rising fuel inventories pressured the oil markets. Last week, the Labor Department said U.S. employers cut 467,000 jobs in June, while the unemployment rate rose to 9.5 percent, the highest level since August 1983.

The Institute for Supply Management's services index rose to 47.0 last month from 44.0 in May, above economists' forecast.

But at the same time, Nigerian militants said they sabotaged a Chevron oil facility and seized a chemical tanker and six crew members. The Movement for the Emancipation of the Niger Delta said it attacked Chevron's facility on Sunday; hours after it sabotaged a Royal Dutch Shell operated oil well.

In a report, several U.S. buyers of Saudi crude told Reuters on Monday that Saudi Arabia plans to keep oil shipments to the U.S. unchanged in August.

In the last week, Oil dropped below $66.5 a barrel as unemployment data hardened views economic weakness would sap energy demand. In the latest sign the economy of the world's top consumer was still struggling, data on Thursday showed U.S. employers cut 467,000 jobs in June and the jobless rate rose to a 26-year high. Euro zone unemployment climbed to a 10-year high.

Report from JP Morgan on Friday also affected the oil prices .According to the report it expected oil prices to correct to about $60 a barrel or lower.

Weekly outlook (DWTI: July)

Supports are $ 64.95, $59.53and $56.12. Resistances are $70.60, $72.94 and $74.01.

DWTI (July) traded in the range $65.31-63.41 and closed at $64.05

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (July) - Bullish above $ 64.80 Bearish below $64.00



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Gold Intraday Outlook

U.S. gold futures fell toward $920 an ounce yesterday as tumbling crude oil prices reinforced the view that inflation was nowhere imminent, weighing on bullion's appeal as a store of value.

U.S. crude oil futures ended lower for the fourth day in a row on Monday as economic concerns reflected in dismal jobs data, tepid demand and rising fuel inventories pressured the oil markets. Oil prices fell to a five-week low around $64 a barrel on doubts over a prompt recovery of the global economy, hurting gold's inflation hedge appeal.

India's gold imports in June were likely around 8 to 10 tonnes, down from 24 tonnes the same month a year ago - Bombay Bullion Association.

The Bombay Bullion Association said demand for gold and silver from India, the world's biggest bullion consumer, is likely to be pressured further this year by an increase in import duty in the budget for 2009/10. India's doubling of import duty on gold and silver is likely to encourage recycling of the metals locally in what could continue to keep imports subdued for the rest of this year also affected the bullion movements .

At the same time, the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1,120.19 tonnes as of July 6, down 0.36 tonnes or 0.03 percent from the previous business day.

Holdings in the trust, which issues securities backed by physical stocks of gold, have declined in the past few weeks as growing optimism about the global economy sapped investors' appetite for bullion as a safe-haven asset.

Weekly Outlook (DG. Aug.)

Supports are $920, 912 and 900 Resistances are 948, 965 and 986

Last day DGCX Gold Aug Traded in the range $931.40-$920.60 and closed at $ 923.90

TECHNICAL OUTLOOK (Intra-day)

GOLD (Aug) - Bullish above $ 927 bearish below $920


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safe trade calls

GOLD

DUE TO FLUCTUATION IN INR=$ GOLD WILL REMAIN MORE VOLATILE. As long Resistance of 15800 & 16000 again correction expected. for the day sell below 15350 S/L 15400 and T/p 15250-200/15100/ below down rally OR sell ard 15985-990 S/L 16000 and T/p 15800-15700. Sustain close above 16000-16050 towards 16500 in coming days (any time close above 15900-16050 bullish while close below 15100/14725/13925-13740/13350/13025/12750 bearish for medium term)


SILVER

Continue to view as long Resist of 22350/22625 & 23050 down trend seen continue and sustain close below 21450 seen towards 20600 in coming days. for the day sell only below 21700 S/L 21800 and T/p 21600-525/21450/below down rally OR sell ard 22320-330 S/L 22350 and T/p 22200-22000 (any time close below 21450/20150/19425/18900/ 18000/17375/16925/16100/15775 bearish rally while close above 23700/ 25000/26100/27250 bullish for medium term)


CRUDE


THIS WAS OUR VIEW IN REPORT Dt. 24-2-09 "as long Support of 1905 Bounce back expected" & SAME DAY PRICE TURN FROM LOW EXACT=1905 AND THIS WAS OUR VIEW YESTERDAY "if Rally sustain expect price towards 2300" & SEE PRICE REGISTER HIGH=2284. Continue to view, as long Support of 2180 & 2125 Uprally likely to continue. for the day buy only abv 2285 S/L 2265 and T/p 2305/2325-35/close abv new uprally towards 2450 in coming days OR buy ard 2185-90 S/L 2180 and T/p 2210-30 (now crude need to close above 2285-2335/2450/ 2765 for bullish rally while close below 2125/1905-1860/1625 bearish for medium term)


COPPER

Continue to view, as long support of 169 & 167 uptrend seen continue. for the day 176.25 S/L 175 and T/p 176.75/179-180/close abv test 189-190 atleast / towards 195 in coming days OR buy ard 169.3-169.5 S/L 169 and T/p 171-172.5 (upside strong rally only on close above 180/200/217.5 while close below 160/ 154/140.5 bearish for medium term)


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DGCX Crude Outlook 10th Feb, 09

U.S. crude oil futures settled lower yesterday as concerns about recession and demand. Weakness in heating oil and gasoline futures also weighed on oil prices.

At the same time OPEC view on production limited the crude price from more falling .According to the report, OPEC is willing to cut oil output further at a March meeting, the group's secretary-general said Monday, adding he would like to see full compliance with existing curbs first. OPEC's president and ministers from Iraq, Venezuela and Iran have also raised the prospect of more cuts.

U.S. crude oil futures ended lower on Friday also as oil demand worries mounted after government data showed the economy last month shed the biggest number of jobs in 34 years and Crude oil speculators on the New York Mercantile Exchange cut net long positions sharply in the week to Feb. 3, data from the U.S. Commodity Futures Trading Commission released on Friday showed.

Weekly Crude Oil (DWTI January.)

42.65 And 39.85 is the trading range, breaking either side may clear the direction. Resistances are $44.70, 47.38. Supports are at $37.10, $34.80.

DWTI (MAR) traded in the range $42.20 - $39.45and closed at $39.56

TECHNICAL OUTLOOK (Intra-day)
DGCX Crude (MAR) - Bullish above $39.80 Bearish below $39.30

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DGCX Gold Outlook 10th Feb, 09

Gold futures ended below $900 an ounce yesterday on profit taking from the recent rally, triggered by optimism ahead of economic stimulus plans to be unveiled by the U.S. government.

Traders were awaiting an announcement on Washington's massive stimulus plan. The Senate was due to vote on the package later Monday to clear the way for its passage on Tuesday.

But at the same time the world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its bullion holdings held unchanged at a record 867.19 tonnes as of Feb. 6.

U.S. gold futures fell on Friday also as weaker than expected U.S. jobs data boosts expectations Washington will act quickly to implement its fiscal stimulus policy, with rising stock markets suggesting some investment is being diverted back into shares.
According to the report from U.S Labour Department, jobless claims were up 35,000 last week to 626,000, more than expected and the most in 26 years. And also U.S. Labour Department said that productivity was up an annual rate of 3.2% in the fourth quarter, more than expected. Unit labour costs were up an annual rate of 1.8% in the fourth quarter, less than expected.
International spot gold traded in the range $ 911.70- $ 879.80a Troy Ounce and last quoted at $894.50

Weekly Outlook (DG. OCT.)

$933 is the major resistances .If sustain above that level, expect more uptrend. Resistances are $954, $968, $988. Supports are at $909, $899, $881 and $862.

Last day DGCX Gold APR. Traded in the range $909.70-$892.90and closed at $ 895.40

TECHNICAL OUTLOOK (Intra-day)

GOLD (APR) - Bullish above $ 898bearish below $ 893

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DGCX Gold Outlook 5th Feb, 09

U.S. gold futures settled up 1 percent yesterday, rebounding from the previous session's decline on worries over massive liquidity injections by central banks and the expectation of more uptrend in precious metals in light of major brokerage upgraded its price forecast.

Gold prices rose yesterday despite strong dollar as Passage of President Barack Obama's $825 billion proposed economic stimulus package would likely be inflationary.

According to the report from UBS, Gold investment demand will double in 2009 compared to 2007, and gold prices will average $1,000 an ounce in 2009.

The U.S. Census Bureau said that construction spending was at an annual rate of $1.054 trillion in December, down 1.4% from November's pace. For all of 2008, construction spending totaled $1.079 trillion, down 5.1% from a year ago.

International spot gold traded in the range $ 908.70- $ 894.50a Troy Ounce and last quoted at $905.40

Weekly Outlook (DG. OCT.)

$933 is the major resistances .If sustain above that level, expect more uptrend. Resistances are $954, $968, $988. Supports are at $909, $899, $881 and $862.

Last day DGCX Gold APR. Traded in the range $910.30-$896.60and closed at $ 905.40

TECHNICAL OUTLOOK (Intra-day)

GOLD (APR) - Bullish above $ 899bearish below $ 894



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Global Recap – 3rd Feb, 09

Gold's turned below $900 as underlying fundamentals are weak according to the world's largest gold producer, along with Russia the states reporting rising production while jewellery demand is soft. China's production hit a record 282 tonnes in 2008, the China Gold Association said, up 4.3% from 2007. High prices are scaring off jewellery buyers, who account for almost 70% of global demand for gold. The volume of gold jewellery sales in Abu Dhabi fell 70% in January due to rising prices.

OPEC will discuss a further supply cut of about 1 million barrels per day (bpd) when it meets in March if oil prices remain low, an OPEC source told Reuters. The Organization of the Petroleum Exporting Countries meets on March 15 in Vienna. Despite OPEC agreeing since September to reduce supply by a total of 4.2 million bpd, oil prices remain around $41 a barrel, a level that officials from the group say is too low. Pending sales of existing U.S. homes rebounded as buyers waded back into the market to take advantage of lower prices and mortgage interest rates.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in December, surged 6.3% to 87.7, rising for the first time since August. Compared with the same period a year-ago, pending homes sale were up 2.1% in December. Last week, the NAR reported an unexpected rise in existing home sales in December, driven mainly by distressed sales, with prices falling from a year earlier by the biggest margin in over 40 years. Stability in the housing market is critical to the U.S. economy's recovery. The economy slipped into recession in December 2007. Falling house prices, coupled with the stock market collapse and tight access to credit, have hit consumer spending, which accounts for about two thirds of U.S. economic activity.

Copper rose on optimism over U.S. home-sales data, but rising inventories capped greater gains. Pending sales of existing U.S. homes rebounded in December, data showed as buyers waded back into the market to take advantage of lower prices and mortgage interest rates. The Institute for Supply Management's index of U.S. factory activity rose to 35.6 in January from a near three-decade low of 32.9 in December, above expectations, but still showing the sector shrinking. Weak demand prospects were reflected in the rise in inventories. Copper inventories on the LME rose 4,100 tonnes to 495,300 tonnes, the highest since late 2003, while aluminum stocks grew 28,300 tonnes to a record of around 2.84 million tonnes.


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important charts

click the pics to large viwe







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DGCX Gold Outlook 3rd Feb, 09

U.S. gold futures settled more than 2 percent lower yesterday, holding just above $900 an ounce on a combination contract rollover, technical selling and signs of weak jewelry demand.

At the same time, world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its bullion holdings held steady at record 843.59 tonnes as of Jan. 30

The U.S. Census Bureau said that construction spending was at an annual rate of $1.054 trillion in December, down 1.4% from November's pace. For all of 2008, construction spending totaled $1.079 trillion, down 5.1% from a year ago.

The Institute of Supply Management's index of manufacturing increased from 32.9 to 35.6 in January, better than expected, but still a sign of contraction

International spot gold traded in the range $ 928.20- $ 900.70a Troy Ounce and last quoted at $901.25

Weekly Outlook (DG. OCT.)

$933 is the major resistances .If sustain above that level, expect more uptrend. Resistances are $954, $968, $988. Supports are at $909, $899, $881 and $862.

Last day DGCX Gold APR. Traded in the range $930.8-$903.10and closed at $ 927.90

TECHNICAL OUTLOOK (Intra-day)

GOLD (APR) - Bullish above $ 908 bearish below $ 902


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DGCX Crude Outlook 28th Jan, 09

U.S. crude futures settled 9 percent lower yesterday, declining on reports of plunging U.S. consumer confidence and home prices that kept concerns about slumping oil demand in focus. Expectation of build up in weekly inventory also influenced the oil prices

According to the data, The Standard & Poor's/Case-Shiller index of home prices in 20 cities was down 18.2% in November from a year ago, roughly as expected.

The Conference Board's index of consumer confidence fell from 38.6 to 37.7 in January, weaker than expected. Richmond Federal Reserve's regional index of manufacturing improved from -55 to -49 in January, still a sign of contraction.

Weak movements in natural gas futures also adversely affected the crude oil movements.

Weekly Crude Oil (DWTI January.)

Expecting bullish movements above $44.25; Resistances are $47, $50 and $55. Supports are at $41.70, $39.30, $ 35.50

DWTI (JAN) traded in the range $47.08 - $41.75and closed at $41.58

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (January) - Bullish above $41.73bearish below $41.20


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DGCX Gold Outlook 28th Jan, 09

U.S. gold futures ended lower yesterday after a three-session winning streak, as investors locked in profits after the price of bullion recently rallied based on safe-haven buying amid economic worries and strong investment demand. Weak oil prices also adversely affected the precious metals movements. Oil price dropped more than $4 to below $42 per barrel, triggered profit taking in gold futures.

At the same time dollar fell against the euro yesterdays after data showed prices of U.S. single-family homes dropped by a record 18.2 percent in November from a year earlier.

According to the data, The Standard & Poor's/Case-Shiller index of home prices in 20 cities was down 18.2% in November from a year ago, roughly as expected.

But on Monday gold rose above $900 an ounce to the highest level in more than three months as interest in bullion as a haven from risk and a weaker dollar against the euro supported buying. Fresh investment demand in light of weak world economy also supported the precious metals movements.

International spot gold traded in the range $ 906.90- $ 891.50 a Troy Ounce and last quoted at $897.30

Weekly Outlook (DG. OCT.)

Gold prices if sustain above 905 is bullish. Resistances are $918, $833, $952 and 988. Supports are at $892, $875, $861.

Last day DGCX Gold FEB. Traded in the range $909.30-$894.80and closed at $ 899.80

TECHNICAL OUTLOOK (Intra-day)

GOLD (FEB) - Bullish above $ 903 bearish below $ 897

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Global Recap -21st Jan, 09

Crude oil revolved around $40 a barrel as further evidence emerged of a deepening global slowdown that is crushing demand for fuel. The global oil demand is expected to contract more sharply in 2009 than previously expected, as the deepening economic crisis spreads to the developing world. World oil demand is predicted to fall by 430,000 barrels per day (bpd) in 2009 to 85.43 million bpd, with demand growth in emerging economies falling by more than half compared to 2008. Moreover China in its six-year commodity price rally started in 2002, was expected to release fourth-quarter GDP data this week that economists say will show 7.0% growth, the slowest pace of expansion in nearly a decade for the world's third-biggest economy. Crude oil stocks in the United States, the world's biggest energy consumer, rose by 1.4 million barrels last week, with distillate stocks seen down 1.4 million barrels due to cold winter weather. Gasoline stocks are expected to be up 2.1 million barrels, up 5.1 million barrels from a year ago.

Gold eased but held above $850 an ounce as interest in the metal as a haven from risk supported prices. A combination of underperformance in other assets, fears over economic growth and the falling interest rate environment are all boosting the appeal of gold. On the currency markets, the euro firmed a touch against the dollar amid a spate of bad news from the euro zone economies. European Central Bank President Jean-Claude Trichet played down the threat of deflation as he hinted at further interest rate cuts and dismissed speculation about a euro zone break-up. Trichet said that while the central bank was wary of cutting interest rates too low, policymakers had not said the current 2% setting was the lowest level. Financial turmoil and downgrades to Greece and Spain's credit ratings. The economy is expected to contract by 1.6% this year, twice the 0.8% fall seen in last month's poll, but slightly better than the 1.9% contraction forecast by the European Commission.

Copper dwindled and aluminum slumped to a 5-1/2 year low as news that world's biggest miner BHP Billiton was cutting jobs due to the global recession hit market sentiment. BHP, which until now had set itself apart from other miners by maintaining output, writing off $1.6 billion, as it battles a collapse in commodity prices. Further rise in copper and aluminum stocks also weighed on prices. Aluminum producers have moved towards cutting output but there is so many surpluses metal around in the world that making its way into the warehouses. But the supply cutbacks have so far failed to support metal prices as the market focused on demand, which analysts said had dried up in the last couple of months. Falling base metal prices due to a slump in demand have forced miners to scale-back production and downsize. Consumption in China temporarily cools with most firms having finished their purchases ahead of the Lunar New Year holidays.


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Gold Outlook 6th Jan

U.S. gold slipped 2 percent on Monday as Strong dollar and by a planned U.S. stimulus plan despite oil rose 5 percent as Israel deepened its thrust into Gaza on the 10th day of violence.

Investors welcomed news that U.S. President-elect Barack Obama is seeking as much as $310 billion in tax cuts as part of a proposed stimulus package that could be worth up to $775 billion and supported the dollars movements.

U.S. Dollar rose against the euro yesterday supported by a planned U.S. stimulus package and increased expectations of interest rate cuts by major central banks other than the Federal Reserve.

At the same time the U.S. Census Bureau said that construction spending was at an annual rate of $1.0784 trillion in November, down .6% from October's pace and down 3.3% from a year ago.

International spot gold traded in the range $ 883.55- $ 843.50 a Troy Ounce and last quoted at $858

Weekly Outlook (DG. OCT.)

Expected trading range is $892- 854, breaking of either side will make the direction. Resistances are $906, $917, $935. Supports are at $844, $831, $820

Last day DGCX Gold FEB. Traded in the range $874.60-$844.80and closed at $ 859.50

TECHNICAL OUTLOOK (Intra-day)

GOLD (FEB) - Bullish above $ 862 bearish below $ 856


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gold outlook

Gold held steady for US and Japanese investors early Thursday, and leapt for everyone else, as a fresh spike in the currency value of Dollars and Yen – both used to fund leveraged speculation during 2001-2007 – matched new losses in world equity markets.

"Global assets keep deflating, inflation is falling faster than expected," writes Walter de Wet, head of commodity research at Standard Bank in Johannesburg in his Gold Market note today.

"We've become convinced that we'll see a series of aggressive interest rate cuts, especially in the Eurozone and UK...Standard Bank maintains that the bias for the Dollar is towards strengthening in the next three months, and erratically so."

After the S&P on Wall Street closed Wednesday at a new five-year low, Tokyo's Nikkei ended today nearly 7% lower – more than 1,400 points down for Nov. so far – as the Japanese Yen gained 5% against the Euro in violent trade.

Here in London, the FTSE100 tumbled through the 4,000 mark – a 41-month low first hit in mid-Oct. – while the Pound lost almost three US cents from Wednesday's brief high.

For French, German and Italian investors wanting to Buy Gold today, the price moved up to a 3-week high of €597.

The Gold Price in Sterling jumped back above £500 an ounce.

"Gold [was] one of the few assets remaining that could be sold at a reasonable price to meet margin calls on other, worse-performing assets," explained the World Gold Council (WGC) in its latest quarterly report Wednesday, pointing to the apparent failure of Gold's Safe Haven Role during Sept. and Oct.

The WGC reports a record 121% jump in physical gold investment worldwide during the third-quarter of this year.

Global gold-market supplies, in contrast, fell by 9.7% year-on-year, led by a sharp drop in central bank gold sales.

"The rate of physical Gold Buying has been impressive, and supply remains constrained," agrees the latest Fortis Metals Monthly from Virtual Metals, the London-based consultancy.

On the supply side, "dehedging [by Gold Mining firms] continues to fade and central bank sales are very weak," it says.

"Perhaps when institutional investors, such as hedge funds, have stopped liquidating their holdings, the price will gain. But it needs to do so soon to be convincing."

In the broader raw materials market, meantime, forced sales to cover losses elsewhere have squashed commodity-fund investments by one half, Virtual Metals goes on, since peaking above $200 billion in June.

Today crude oil fell towards $53 per barrel, base metals sold off hard, and "safe haven" government bonds rose yet again, pushing the yield offered by 10-year US Treasury debt down to 3.27%.

Yesterday's US consumer-price data put the headline inflation rate at 3.7% year-on-year. Stripping out "volatile" food & energy prices, core CPI – the Federal Reserve's preferred measure – stood 2.2% higher from 12 months earlier, and precisely in line with core US inflation's average growth over the last 10 years.

Even so, "The largest headline CPI decline in the US in years implies to me that [while] gold is a hedge against inflation, it doesn't look like there is any inflation in the short term to hedge," reckons Bart Melek, commodity strategist at BMO Capital Markets, speaking to Canada's National Post.

Put another way, "There's absolutely no need to Buy Gold as a hedge against inflation," claimed Peter Fertig at Dresdner Kleinwort in Hainburg, Germany to Bloomberg News earlier this week.

Physical gold investors disagree, however, while central banks the world over continue to battle the risk of deflation with record-low interest rates and strong money-supply growth.

The Swiss National Bank (SNB) today slashed its lending rate by an unprecedented 1.0% to just 1.0% in an unscheduled move.

"More aggressive easing...should reduce the odds of a deflationary outcome," agreed the US Federal Reserve at its most recent policy meeting, minutes released on Wednesday show.

The US monetary base (meaning currency in circulation and bank deposits held at the Federal Reserve) has expanded by more than 70% in the last two months, creating more cash inside nine weeks than existed in total seven years ago.

Growth in the Bank of England's broad "M4" measure of the UK money supply meantime swelled by 15.1% in October – an 18-year record – figures showed this morning.

New private-sector borrowing rose faster still, up by 16.1% year-on-year thanks to a record monthly expansion of £52.8 billion ($79.2bn), even as the supply of credit to households and business dried up.

The vast bulk of new credit creation, according to Bank of England data, is going instead to non-bank financial corporations – in particular brokers, exchanges and clearing houses needing large cash positions to use as a "fire break" in case of a major counter-party default.

All told, these "other financial corporations" accounted for more than 96% of new UK borrowing in Sept.

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outlook

Crude oil dived under $50 a barrel to hit the lowest level since May 2005, deepening losses as financial markets reflected ever lower confidence in the world economy and evidence mounted of falling fuel demand. As economic slowdown has destroyed fuel demand, oil companies plan to store millions of barrels of oil in the hope economics will improve. Oil differs from other commodity markets in that producer group the Organization of the Petroleum Exporting Countries can intervene to curb supplies, in theory providing support for prices. Since early September, OPEC has said it will remove around 2 million barrels per day from international markets, but market has taken the view that falling demand is a bigger factor than tightening supply.

Gold alleviated more than 2% as physical gold bullion buying offset a broad-based commodity decline, a strong dollar and further losses in equity markets. Gold came off its initial high as U.S. stocks slid as much as 3% early, prompting liquidation across all asset classes. Strong physical buying of gold such as coins and bars boosted prices, and demand increased with price dips. Global demand for gold jumped 18% year-over-year to 1,133.4 tonnes in the third quarter, as strong buying by investors at a lower gold price reversed a weaker trend earlier this year according to the World Gold Council. Gold however consolidating and trading at $720-$752 technical levels. Gold held up well despite a 5% tumble of crude oil, trading just above $50 per barrel.

The number of U.S. workers filing new claims for jobless benefits surged by a larger than expected 27,000 for the week to their highest level in 16 years, according to the Labor Department, as a harsh economic environment forces employers to cut back on hiring. Initial claims for state unemployment insurance benefits were a seasonally adjusted 542,000 for the week from a revised 515,000 the previous week. A Labor Department official said there were no special factors influencing the report. However analysts polled by Reuters had forecast 505,000 new claims versus a previously reported count of 516,000 the week before. Moreover New York-based Conference Board states in its monthly forecast of economic activity declined 0.8% in October, worse than the 0.6% decrease expected by economists surveyed by Thomson Reuters. Over the last seven months, the index declined at a 4.7% annual rate, faster than any decline since 2001. Most of the decline was due to the plunge in stock prices, the drop in building permits and the decline in consumer expectations.

The price of copper tumbled as rising stockpiles and recession fears underscored the red metal's weaker demand outlook. Record lows in U.S. housing starts, surging inventory levels in London warehouse stocks, declining global equity markets, strength in the dollar, and uncertainty whether U.S. automakers will win emergency government loans contributing to copper's bearish tone. Fears of a deep global recession heightened after U.S. jobless claims jump to their highest level in 16 years.


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GENERAL MARKET CONDITIONS

It’s the US dollar story for gold and silver and nothing else. Euro/Usd rose to 1.2813 while comex gold December rose to $764.80 and thereafter the euro fell and gold, silver and crude oil also fell. Still gold and silver have performed exceedingly well. Gold, silver and other commodities have been falling only after (A) US dollar gains or (B) Stock markets fall. When conditions A &B occur simultaneously then they fall else they are volatile. This will continue today also.

Minutes of Fed meeting

Federal Reserve policy makers last month predicted the U.S. economy will contract through the middle of 2009, with some prepared to lower interest rates further in response, a record of their meeting showed. ``Some suggested that additional policy easing could well be appropriate at future meetings,'' the Fed said in minutes of the Oct. 28-29 Federal Open Market Committee gathering released. In any event, the Committee agreed to take whatever steps were necessary to support the recovery. Fed officials cut their forecasts for inflation and growth to account for the choking off of credit to households and businesses as some of the biggest financial companies failed. Some FOMC members foresaw a risk that the inflation rate will fall below the Fed's objective of ``price stability.''

Our View: Interest rate cuts by the Fed will reach a bottom in December 2008 or January 2008. Thereafter it remains to be seen what other hard measures Federal reserves takes to spruce the US economy. In the short term the US dollar may gain as other regions across the globe cut interest rates and interest rate differentials narrow. Once the interest rates cuts are over by most of the countries the US dollar will weaken at a modest pace. This may happen for the remaining part of 2008 but will surely happen after the first quarter of 2009.

COMEX COPPER DECEMBER

Copper needs to hold $157 to prevent another round of selling to $149 and $135. On the higher side $172 is the resistance. Overall downward pressure is there on copper.

NYMEX CRUDE OIL (1ST CONTRACT)

Crude oil needs to hold $49.80 to prevent a fall to $46.00. On the higher side $53.80 and $56.20 are the resistances.


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GENERAL MARKET CONDITIONS

Are base metals worth investing for a long time?

Most of the base metals have fallen over thirty percent over the year. Aluminum has fallen least while nickel has fallen the most among the base metals. Even the invincible copper has crashed in the past two months. Base metals and industrials are dependent on global economic growth, particularly China. 2008 Chinese GPP growth is expected to be the slowest in the past five years to 9.50%. China has been the biggest consumer of base metals. If there is further evidence of a slowdown in Chinese growth in the rest of 2008 then base metals can get further hammering.

The current bear phase in base metals is a part and parcel of a long term bull rally which may last for two to three quarters. Value based buying at lower levels and restocking by end users will ensure that the long term Bull Run continues. The clear picture will emerge only at the beginning of the 2009.

In the short term for base metals to rise the following conditions need to be fulfilled:

* Equity markets rally.
* Liquidity conditions improve.
* Most of the base metals are highly oversold. So a technical bounce can happen anytime while maintaining the bear trend.
* Chinese demand improves. Unless Chinese improves the rallies in base metals will be fake.
* Outlook for 2009 global growth stabilizes.

Silver has risen on a rise in physical demand while gold and energies fell on US dollar gains. Various central banks are taking further steps to calm the negative investor sentiment. There is lack of major market moving news today except for the US weekly crude oil inventories. The US dollar has been gaining on expectations that other central banks will cut interest rates faster than US. This trend may continue for a few more weeks.

COMEX COPPER DECEMBER

Copper needs to hold $195 to prevent a fall to $173. Highly oversold conditions exist. On the higher side copper needs to break $228 to find intra day buyers.


MCXARUN
9994500540

GENERAL MARKET CONDITIONS

The investor is no idiot. Even if central banks hide or manipulate all the statistical information he will not get swayed or carried away by the same. This is the message given by the investors to the central banks after the fall in global stock markets despite coordinated interest rate cuts by all the central banks.

The Dow Jones closed below 9000 on signs that carmakers will be the next victims of the credit crisis. Coordinated interest-rate reductions by major central banks on October 8 failed to revive lending among banks. The 3 month London interbank offered rate (Libor), rose to 4.75% yesterday, the highest level since December 28. It's an absolute panic in stocks. Bad assets need to be taken off balance sheets, new capital needs to be added and then we might, maybe, get a respite.

Yamato Life Insurance Co., a Japanese insurer, filed for court protection from creditors in the nation's first bankruptcy in the industry in seven years, with debt exceeding assets by 11.5 billion yen ($116 million). US credit woes now are spreading to Japan. I hope the spread will be limited to developed nations. If US credit woes spread across emerging markets then there will be a total break down in the global financial system.

If interest rates and other measures taken by various central banks fail then currency devaluation could be the next step. Currency devaluation will happen if and only if the measures fail. This is just one of the measures which I am not ignoring and will not happen in 2009. If central bank measures fail by 2009 then there is a realistic chance of currency devaluation in 2010.

Markets will be looking forward to the G7 meeting over the weekend for comments and further actions.

COMEX COPPER DECEMBER

$200 should provide some support. Highly oversold conditions exist. A close below $244 today and next Friday will result in $170 and $140. Resistance starts at $244 and $280.


MCXARUN
9994500540

GENERAL MARKET CONDITIONS

The US bail out package has been passed. US September non farm payrolls have once again come in negative. Europe and rest of the world is copying the US and are bailing out defunct financial companies. Traders and investors will be thinking what next? The following factors (in short) will be the key to the markets for the rest of the third quarter:

1) US election scenario and the next president till mid November.

2) Interest rate cut: Bank of England may cut interest rates this week. Markets have fully factored in a quarter of a percentage interest rate cut by the Federal Reserve in its 29th October meeting. European central bank may also cut interest rates in November or December, 2008 by a quarter of a percentage. Interest rate cuts have always been bullish for gold and precious metals.

3) US dollar: US dollar has been gaining on the back of woes in Europe and UK and their inability to take unified action and quick action. Precious metals will soon be delinked from currency markets and the US dollar.

4) The number of new bankrupt companies coming to the surface: It will be all about mathematics. Markets will be calculating the amount spent on the buying out/financing bankrupt companies and whether the $700 billion is too little or too much. It will be hard to make any judgment on this. Volatility in all financial markets will rise.

5) Growth in other regions across the globe. The decoupling theory has been dumped. Decoupling between emerging markets growth and US economic growth. But emerging markets will recover faster than US. It will be all about the pace of recovery for emerging markets. If emerging markets also moves towards recession (too early to comment on this) then the pace of rise on precious will rise and 2007 October to March can be repeated in 2008 also.

6) Balance sheet of countries: Once all the financial defunct companies are brought up by all the central banks what will their balance sheets look like. At the moment countries are trying to finance each others. There will be a situation when will not be able to finance each other. Printing more currency notes and issuing more treasury bonds will not the solution to the financial mess created now. Gold will indirectly be the reserve currency of the world in the long time.

7) Spread of credit crunch across different parts of the globe: The US credit crunch has spread across the Atlantic in UK and Europe. BNP Paribas will take control of Fortis’s units in Belgium and Luxemburg. Further German government and financial institutions agreed on a 50 billion euro rescue package for Hype real estate holding AG.

The central banks across the globe are making coordinated effort for any sustained recession like environment. Global central banks have had a history to creating assets bubbles. This time around it will be the accumulation of bad loans/defunct company asset bubbles. If central banks do not take hard decisions then global recession will be only way out.

NYMEX CRUDE OIL (1ST CONTRACT)

Crude oil needs to hold $88 to be in bullish zone and target $98 and $103+ once again. A consolidated fall below $88 will result in $81.60 and $77.


MCXARUN
9994500540