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

MCXAARUN
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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.

MCXARUN
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safetrade calls

GOLD

for the day sell only below 11900 & more below 11850 S/L 11920 and T/p 11810-15/11750-760 upto 11700/close below 11690 down rally sharp OR buy only abv 12100 S/L 12080 and T/p 12140-175 upto 12300 in days to come (any time close above 12150/12400/ 13100/13425 bullish while close below 11690/11375/11000 bearish for medium term)


SILVER


we book profit on buy last, for the day buy abv 23450 S/L 23350 and T/p 23525/650-675/sustain abv test 23850-24000 and close abv 24000 test 24500-700 atleast/upto 25100 in coming days OR sell below 22950 S/L 23050 and T/p 22875-800/22700-675/22550/close below 22550 test 22200/22000 atleast, (any time close below 22550/22050/ 21325-250/20150/19390/18600-250/ 17850 bearish rally while close above 23900-24000/26100/27500 bullish for medium term)]


CRUDE


EIA Crude oil inventory, schedule to release today. book profit on buy abv 4435, for the day buy only abv 4515 S/L 4495 and T/p 4540-50 in days to come OR sell only below 4420 S/L 4432 and T/p 4400-4380/60 upto 4325 (now crude need to close above 4510 for bullish rally while close below 4365/4260/4080/ 3960-3905 bearish for medium term)


COPPER


book profit on sell below 339.5, for the day sell only below 337.5 S/L 338.75 and T/p 336/334.5 upto 332 atleast and fall below 327 down rally sharp OR buy only abv 345.5 S/L 344 and T/p 346.5/ 348-350/352.5-354/close abv 354 test 365-368 atleast in coming days (upside strong rally only on close above 354 while close below 338.5/327/310.5-303/ 281/267.5/254.5/235 bearish for medium term)

MCXARUN
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GENERAL MARKET CONDITIONS

The G7 meeting has failed to stop the US dollar’s slide despite concerns over the same. Traders are looking at the growth differential between US and other countries before investing. Unless this differential reduces or chances that this differential will reduce in the future the US dollar will continue to find sellers at higher levels. However in the second quarter the pace of the US dollar’s decline will be slower than the first quarter. The same will be with precious metals.

OPEC has quietly begun to reduce its oil production despite calls from the US and Europe for the group to pump more so that prices fall. Output from the core countries of the 13-member cartel last month fell to 27.3m barrels a day, down from the 27.6m b/d they produced in February and 27.8m b/d in January. The International Energy Agency, the western countries’ watchdog, said on Friday in its monthly report. The cuts come despite assurances from Opec ministers that they were keeping their output steady. There are two aspects to crude oil prices: (A) The rise in crude oil prices is more due to investment interest instead of demand and supply factors (B) Opec does not want crude oil prices to fall and it’s base price is getting higher. It is supplying the market with some form of bullish news which is preventing investors from going short or exiting their longs. Another point which I have observed over the past one year is that cyclical demand factors in Asia is the key mover of crude oil prices instead US demand. Crude oil prices can rise to $125 and still fall back to $85 and below.

It will be a technical trade today in all metals and energies. We prefer a buy on dips strategy as long as key technical supports are holding. Selling is preferable only when metals are unable to break medium term technical resistances

GOLD -- JUNE FUTURE.

Gold is trading in a wider $912-$950 range. A breakout from this range is in the offing soon.

INDIAN RUPEE (USD/INR)

2007-2008 direct tax collections are expected to rise to Rs.3, 10,000 crore. The government had revised the direct tax collections target from Rs.267, 490 crore to Rs. 305,000 crore. Customs mop up is all set to exceed the higher revised estimate of Rs.100, 766 crore. Service tax collections to hit revised target of Rs.50,603 crore. Higher tax collections will help the government to meet the sops given to farmers ahead of the general elections before May, 2009 without affecting the fiscal deficit. 2007-2008 was an exceptional year for the Indian economy as the stocks markets were at a higher peak. In 2008-2009 Indian stock markets will not rise much as the previous year. Higher food and energy prices along with lower returns from stock markets should result in lower tax collections. The Rupee will be volatile in the coming weeks. The government will like the rupee to appreciate against the US dollar to control inflation. It is considering stopping even basmati rice exports despite the fact that a negligible portion of the Indian population has basmati rice. Intra day rupee should trade in 39.80-40.08 wider range.


MCXARUN
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SAFETRADE CALLS

GOLD

for the day sell only below 11890 S/L 11920 and T/p 11850-55/810 upto 11760 OR buy abv 12025 S/L 12000 and T/p 12060-12100/12140-175 upto 12300 in coming days (any time close above 12175/12400/13100/13425 bullish while close below 11690/11375/11000 bearish for medium term)

SILVER

for the day buy only abv 23650 S/L 23550 and T/p 23750-850/24000/sustain abv uprally sharp test 24300 atleast OR buy ard 22770-80 S/L 22750 and T/p 23000-100, as long support of 22750 & 22550 uprally likely to continue (any time close below 22550/22050/21325-250/20150/19390/18600-250/17850 bearish rally while close above 23900-24000/26100/27500 bullish for medium term)

CRUDE

for the day sell only below 4340-30 S/L 4360 and T/p 4310-4295/4265/4235 OR buy abv 4440-45 S/L 4425 and T/p 4470 -90/4520-40/close abv 4490 test 4600-4650 atleast in coming days (now crude need to close above 4490 for bullish rally while close below 4310/4225/ 4115/3985-3960/3830/3585/3415-3390 bearish for medium term)

COPPER

price turn exact from our resist, book profit on buy abv 345/352, for the day buy only abv 350 S/L 348 and T/p 352.5 -354/close abv 354 test 365-368 atleast in coming days OR sell only below 338.5 S/L 340 and T/p 337/332 atleast and fall below 327 down rally(upside strong rally only on close above 354 while close below 338.5/327/310.5-303/ 281/267.5/254.5/235 bearish for medium term)


MCXARUN
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