OUT LOOK

February gold closed higher on Monday as it consolidated some of last week's decline. The high-range close sets the stage for a
steady to higher opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are
possible near-term. If December extends last week's decline, November's low crossing at 780.40 is the next downside target.
Closes above the 20-day moving average crossing at 813.40 would confirm that a short-term low has been posted. First
resistance is the 10-day moving average crossing at 809.70 then the 20-day moving average crossing at 813.40. First support is
today's low crossing at 783.00 then November's low crossing at 780.40.

March silver closed higher on Monday as it consolidated some of last Friday's decline. The high-range close sets the stage for a
steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways
to lower prices are possible near-term. If March extends last month's decline, the reaction low crossing at 13.500 is the next
downside target. Closes above the 20-day moving average crossing at 14.869 are needed to confirm that a short-term low has
been posted. First resistance is the 10-day moving average crossing at 14.610 then the 20-day moving average crossing at
14.869. First support is today's low crossing at 13.960 then the reaction low crossing at 13.500.

January crude oil closed slightly lower on Monday as it extended last week's decline and tested the 38% retracement level of this
fall's rally crossing at .8741. A short covering rally tempered early losses and the mid-range close sets the stage for a steady
opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are
possible near-term. If January extends today's decline, the 50% retracement level of this fall's rally crossing at .8374 is the next
downside target. Closes above the 10-day moving average crossing at 94.10 would temper the near-term bearish outlook. First
resistance is the 25% retracement level crossing at 91.51. Second resistance is the 20-day moving average crossing at 93.97.
First support is today's low crossing at 87.14 then the 50% retracement level crossing at .8374.

January Henry natural gas gapped down and closed lower on Monday as it extended last week's decline below September's low
crossing at 7.561. A short covering rally tempered early losses and the high-range close sets the stage for a steady to higher
opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices
are possible near-term. If January extends this week's decline, weekly support crossing at 6.801 is the next downside target.
Closes above the 10-day moving average crossing at 7.685 would confirm that a short-term low has been posted. First
resistance is the 10-day moving average crossing at 7.685 then the 20-day moving average crossing at 7.946. First support is
today's low crossing at 7.038 then weekly support crossing at 6.801.

today's datas

Tuesday, 4 December 2007

all times GMT

(last release in parentheses)



0001 UK November BRC retail sales monitor

0030 Australia October retail sales (0.8%)

0030 Australia October building approvals (4.2% y/y)

0930 UK November PMI, construction (57.4)

1000 Eurozone October PPI (0.4% m/m)

1000 Eurozone October PPI (2.7% y/y)

1400 Canada Bank of Canada interest rate decision

2230 Australia November AIG performance of service index (53.2)

2230 Australia Reserve Bank of Australia interest rate decision

GENERAL MARKET CONDITIONS

Markets are positioning themselves for 2008. The key concern for all of them is the extent of recession (if any) in US and what will be the top for crude oil prices. Energy prices and US and growth factors in other G7 nations will dictate the US dollar in 2008. I firmly believe that the US dollar should recover in the second half of 2008 as lagging effects of a stronger currency and higher energy prices results in cutting of interest rates by the ECB, bank of England and others, which will result in narrowing down of interest rate differentials. If interest rate differentials and growth differentials narrow between US and rest of the world (including emerging markets), the US dollar is bound to gain. However in the short term this gap will widen and more US dollar weakness in store. US dollar weakness implies higher precious metals and energy prices.

Zinc, lead, nickel, copper and other base metals took a beating on expectations of slower growth in 2008. Over the past three years base metals have been supported by strikes by mine workers in different mines across the world (apart from fundamentals of demand and supply). Base metals will be volatile for the rest of December as any confirmation that US economy is not slowing could result in paring of some of the November losses. Most of the base metals are yet to test 2004 lows, therefore there could be room for more losses before the next leg higher. Any five percent to ten percent fall in base metals switches the risk to return ratio in favor of the buyer.

GOLD -- FEBRURAY FUTURE

Double bottom has been formed at $778 and gold could test $818 and $844 in short term as long as $778 holds.

SILVER -- MARCH FUTURE

Silver can test $1474 and $1494 as long as $1406 holds. Falls below $1406 then $1396 and $1376 are the targets.

LONG VIEW

GOLD
LIKELY TO TEST 11000 WITH ANY CLOSE ABOVE 10430/10700 & 10775, WHILE CLOSE BELOW 10075/9950 TEST 9800-750 ATLEAST(FEB)


SILVER
LIKELY TO TEST 22000 UPTO 22500 WITH ANY BREAK & CLOSE ABOVE 19975/20450/21325-500, ONLY CLOSE BELOW 18625/18300/18075 & 17750 DOWN TREND AGAIN(MAR)

CRUDE OIL
LIKELY TO TEST 3400-3350 WITH ANY CLOSE BELOW 3510-3470 WHILE CLOSE ABOVE 3775/3915 UPTREND AGAIN(DEC)

COPPER
LIKELY TO TEST 25052/246/242 UPTO 237 WITH ANY BREAK & CLOSE 263.5/259, WHILE ANY CLOSE ABOVE 282/293 UPTREND AGAIN(FEB)

NICKEL
LIKELY TO TEST 1050-35 WITH ANY CLOSE
BELOW 1065 AND CLOSE BELOW 1035 TEST 1000 ATLEAST(DEC)

ZINC
LIKELY TO TEST 83/80 UPTO 76 WITH ANY BREAK & CLOSE BELOW 88, ONLY CLOSE ABOVE 104/110/ 115/119.5 & 128.5 BULLISH TREND AGAIN(DEC)

LEAD
LIKELY TO TEST 105/100 UPTO 97 WITH ANY BREAK & CLOSE BELOW 116/110(DEC)

NATGAS
LIKELY TO TEST 285/278 UPTO 267 WITH ANY BREAK & CLOSE BELOW 291.5, ONLY CLOSE ABOVE 328.5/335 UPTREND AGAIN(DEC)

ALUMINUM
LIKELY TO TEST 95/93-92 UPTO 90 WITH ANY BREAK & CLOSE BELOW 98-97(DEC)

MCXARUN

OUTLOOK

February gold closed sharply lower on Friday as it extended this week's decline. The low-range close sets the stage for a steady
to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term.
If December extends this week's decline, November's low crossing at .780.40 is the next downside target. Closes above the 20-
day moving average crossing at 814.40 would confirm that a short-term low has been posted. First resistance is the 10-day
moving average crossing at 808.40 then the 20-day moving average crossing at 814.40. First support is today's low crossing at
785.00 then November's low crossing at 780.40.

December silver closed lower on Friday and below this month's low crossing at 13.980. The mid-range close sets the stage for a
steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-
term. If December renews this month's decline, the reaction low crossing at 13.325 is the next downside target. Closes above the
reaction high crossing at 15.155 are needed to confirm that a short-term low has been posted. First resistance is the 10-day
moving average crossing at 14.416 then the 20-day moving average crossing at 14.707. First support is today's low crossing at
13.760 then the reaction low crossing at 13.325.


January crude oil closed slightly lower on Friday as it extended this week's decline. A short covering rally tempered early losses
and the high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish
signaling that sideways to lower prices are possible near-term. If January extends this week's decline, the 38% retracement level
of this fall's rally crossing at .8741 is the next downside target. Closes above the 10-day moving average crossing at 94.91
would temper the near-term bearish outlook. First resistance is the 25% retracement level crossing at 91.51. Second resistance is
the 20-day moving average crossing at 94.30. First support is Friday's low crossing at 88.52 then the 38% retracement level
crossing at .8741.

January Henry natural gas closed lower on Friday as it extended this week's decline below September's low crossing at 7.561.
The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold but remain
bearish signaling that sideways to lower prices are possible near-term. If January extends this week's decline, weekly support
crossing at 6.801 is the next downside target. Closes above the 10-day moving average crossing at 7.776 would confirm that a
short-term low has been posted. First resistance is the 10-day moving average crossing at 7.776 then the 20-day moving average
crossing at 8.005. First support is today's low crossing at 7.276 then weekly support crossing at 6.801.

Technicals – MCX (Intra day calls)

CRUDE OIL (December) BULLISH ABOVE 3536BEARISH BELOW 3522

GOLD (February) BULLISH ABOVE 10158 BEARISH BELOW 10125

SILVER (March) BULLISH ABOVE 18930 BEARISH BELOW 18845
COPPER (February) BULLISH ABOVE 280.60 BEARISH BELOW279.80

LEAD (December) BULLISH ABOVE 121.75 BEARISH BELOW 121.40

NICKEL (December) BULLISH ABOVE 1095 BEARISH BELOW 1090

ZINC (December) BULLISH ABOVE 103.30 BEARISH BELOW 102.90

GENERAL MARKET CONDITIONS

Rise in London Inter bank Offered Rate (LIBOR) last week and a fall in energy and precious metals and gains in the US dollar once again reflects that in the short term global markets are nothing but driven by liquidity concerns. The big question in every trader is whether the Fed will cut interest rates even after December or will pause once and then start the interest rate cuts. Interest rate factor will dictate the markets in the first fortnight of December. In the first quarter of 2008 central bankers of G7 nations will have to fight inflation lower base effect. Crude oil had fallen to $50 a barrel in January this year. Lower base effect will result in higher inflation. Gains in crude oil prices have been greater than currency gains; therefore almost the central banks will have to choose between growth and inflation on their interest rate policy in the first quarter of 2008.

Gold and silver and other precious metals and base metals will be volatile as there are a number of central bank meetings till early next week. It will all depend on the future interest rate outlook of these central banks. Gold, crude oil and silver are medium term bullish and short term bearish, only if they are able to overcome short term resistances that there could be a short term technical breakout.

SILVER -- MARCH FUTURE

Silver has to hold $1376 and a daily close below the same will result in $1325. On the higher side only a break $1474 will result in short term bullish zone.

NYMEX CRUDE OIL -- FUTURE

Crude oil has to hold $86.32 to prevent a fall to $82. On the higher side only a break $92 will result in further gains.