GENERAL MARKET CONDITIONS

Greater physical demand in all metals is preventing them from a fall. The US dollar pace of gains has also reduced. This is also further supporting metal prices from a fall. Base metals are getting buoyed on expectations that Chinese demand will increase once the Olympics are over. Base metals manufacturers trying to reduce production so that prices do not fall in the third quarter, when demand picks up due to festivals in different parts of the globe.

CENTRAL BANK GOLD SALES AGREEMNENT

Sales of gold by signatories of the Central Bank Gold Agreement could be the lowest since the pact was signed in 1999, according to the World Gold Council. Around 319 tonnes of gold has been sold so far by the European central banks that signed the agreement, out of a quota of 500 tonnes allowed in each year.

The Swiss Central Bank is the biggest single gold seller this year to date, having disposed of 113.1 tonnes of the precious metal. According to the figures provided by the WGC, the 15 signatories to the accord disposed of 497.2 tonnes of the 500-tonnes allowance during 2004-05,395.8 tonnes the following year and 475.8 tonnes in 2006-07.

Central banks portray a long term picture of things to come, they are not motivated by profit. If central banks are reluctant to sell gold then retail investors should diversify and invest in gold.

LEAD

The world lead market was in a 41,000 metric ton surplus from January to June due largely to strong mine output in Bolivia, the International Lead and Zinc Study Group said. Global refined lead production of 4.273 million tons outstripped consumption of 4.232 million tons. The surplus is larger than the 8,000 tons during the same period the year before, ILZSG data showed. Chinese net exports of refined lead metal totaled 24,000 tons over the first six months of 2008, compared with 141,000 tons for the same period 2007. Mine output also increased, up 10.3% in the first half 2008 compared with the same period in the year before. This was mainly due to higher output in Bolivia, where the San Cristobal mine opened in September last year, and a further sharp increase in Chinese production, ILZSG said.

A 5.4% rise in global refined lead metal output was principally a consequence of increased production in Canada, China, India, Kazakhstan, the Russian Federation, the U.K. and the U.S., ILZSG said.

An increase in world lead demand of 4.6% was driven primarily by further growth in China. Usage in the U.S. increased by 5.9%, but it fell 3.7% in Europe.

Production for June totaled 770,800 tons, up from May's 731,900 tons. Consumption also rose on the month, to 764,200 tons from 713,400 tons in May.

Impact on Lead prices: Fundamentally lead is bullish but LME (3 months) needs to break $2173 to be in bullish zone.

ZINC

The world zinc market was in a 53,000 metric ton surplus in the first half of 2008, the World Bureau of Metal Statistics said. The surplus was slightly higher than the one recorded in the January to May period of this year.

Mine production was 5.77 million tons, or 9.3% higher than the January to June 2007 total. Refined production rose by 147,000 tons to 5.771 million tons with Asian countries, in particular China, contributing an additional 184,000 tons to the world output. The 27-member European Union production fell by 4% and North American Free Trade Association output was slightly lower, WBMS said.

World demand was 116,000 tons higher than in 2007 with the most significant increase recorded in China. Chinese demand was 1.946 million tons which is 34% of the global total, WBMS said. No allowance is made in the consumption calculation for unreported stock changes.

Reported stocks rose by 62,200 tons with almost all of the increase recorded at London Metal Exchange warehouses, WBMS said. LME stocks represented 28% of the global total.

In June, slab zinc production was 1.0216 million tons and consumption was 1.0260 million tons.

Impact on Zinc prices: As long as LME Zinc (3 months) holds $1550 downside will be limited. However as long as zinc does not break $2022 upside will be limited in the short term


MCXARUN
9994500540

safe trade calls

GOLD

PRICE TURN EXACT FROM OUR GIVEN RESISTANCE=11750 AS DAYS HIGH=11744. Now good Resistance seen at 11750 & 11950 from where again correction expected. book profit on buy abv 11550, fresh buy only abv 11750 S/L 11720 and T/p 11800-810 upto 11900 OR sell below 11625 S/L 11655 and T/p 11585-530 upto 11450 where support seen again (any time close above 11750-11950/12680/12950/ 13550/13850 bullish while close below 11125 bearish for medium term)


SILVER


we book profit on buy abv 20000. continue to view as long Resistance of 20500 & 21725, down rally likely to continue. for the day buy only abv 20350 S/L 20300 and T/p 20425-500/ only sustain abv 20500 more upside expected OR sell below 20050 S/L 20140 and T/p 19975-900 upto 19775(any time close below 18900 bearish rally while close above 21900/22850/ 25000/26100/27250/28000 bullish for medium term)


CRUDE

Crude oil inventory schedule to release today PRICE TURN EXACT FROM OUR LEVEL ON BOTH SIDE. book profit on buy abv 5035, buy only abv 5120 S/L 5100 and T/p 5150/5210 OR sell below 4900 S/L 4925 and T/p 4865-45/20/ 4780-60/close below 4760 test 4630-50 atleast in coming days (now crude need to close above 5130/5475/ 5710/6375 for bullish rally while close below 4865/4760 bearish for medium term)

COPPER

for the day sell ard 332.2-332.5 S/L 333 and T/p 330.5/328.5 towards 323 in coming days OR sell below 328.5 S/L 330 and T/p 326/323-22 where support seen for today (upside strong rally only on close above 336.5/351/360.5/371/ 387.5/398 while close below 312/302/ 289/265/251.5/235 bearish for medium term)


MCXARUN
9994500540

GENERAL MARKET CONDITIONS

Gold rose as the dollar dropped on speculation a slumping U.S. economy will prevent the Federal Reserve from raising borrowing costs. Silver and other base metals followed gold. Once again the US dollar is the key to every thing. Historically the bear phase in August in gold and silver is always a buying opportunity while a bear phase in October implies a sustained one. This is August and one should use the sharp fall to invest.

Base metals, traders are taking positions on expectations that Chinese demand will re start after the Olympics are over and a weaker US dollar. Some of the base metals producers have started reducing production as prices have fallen to the top end of production cost. This has been done in order to prevent prices from further sell off.

At the moment, the rise in gold and silver is just a technical rise which if it continues can restart the short term bull phase in gold and silver. Long term bullishness in gold and silver remains intact. US weekly crude oil inventory will be the key. Gold rose as the dollar dropped on speculation a slumping U.S. economy will prevent the Federal Reserve from raising borrowing costs. Silver was little changed.

INTRA DAY TRADING STRATEGY.

· We will prefer to buy comex gold december around $810 and or over $832.

· Silver (comex September), will prefer to buy around $1306 and $1268 or over $1380.

· Copper (comex September) as long as $319 holds downside will be limited.

· Crude oil has to break $119.10-$122.40 zone for $125 and $128.

· COMEX GOLD DECEMBER

Resistance $810 now becomes the support while $845-$850 is the key resistance zone. Intra day gold has to fall below $810 for $800 and $788.

COMEX SILVER SEPTEMBER

A break of $1380 will result in $1510 and $1560. Key intra day support is at $1260.

COMEX COPPER SEPTEMBER

Copper has managed to hold $319 and will try to break $354 today.

NYMEX CRUDE OIL (1ST CONTRACT)

Crude oil has to break 117, else will trade in wider $109-$117 range.

MCXARUN
9994500540

nymex crude intraday

Oil prices continued its weakness yesterday as Tropical Storm Fay headed toward Florida's west coast and was expected to miss key operations in the Gulf of Mexico oil. But on last Friday oil fell below $112 a barrel as OPEC trimmed its forecast for global oil demand growth in 2008 for a fifth month and said production was more than adequate, paving the way for a build in inventories. Growing concerns about demand in industrial nations and the stronger dollar is also adversely affected the oil movements. Oil touched the fifteen week low of $111.70 in the last week.

Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 as growing global economic problems and high fuel prices have cut demand in top consumer the United States as well as Europe. The President of OPEC Chakib Khelil called oil prices abnormal and said they could pull back to $80 a barrel over the long term if the dollar were to continue to recover and global political worries eased is also adversely affected the oil movements .

According to the International Energy Agency, the Output by the producer group rose 145,000 barrels per day in July to 32.8 million barrel per day(bpd) . And also predicted oil demand would rise by 1.0 million barrels per day this year, 30,000 bpd less than the previous forecast.

At the same time in last week, According to the report from EIA, gasoline stocks fell 6.4 million barrels, more than a forecast decline of 2.1 million barrels and U.S. crude inventories fell by 400,000 barrels last week, double the forecast decline. Distillate stocks unexpectedly fell by 1.7 million barrels.

Light, sweet crude oil for September delivery in the New York Mercantile Exchange traded in the range $115.35 - $112, before settling at $113.14 a barrel.

Oil price had touched an all-time high of $147.27 a barrel on 11th July but has corrected from there in the succeeding weeks.

Crude Oil (DWTI Aug.)

Crude oil price remain weak below $117.50 a barrel .But expecting a recovery above $117.50 , if sustain above that levels ,can expect more uptrend .Next levels are $120.40,$123.50 and $129. Supports are $112.50, $110.00, $105.00, and $ 99.30.

DWTI (Aug) traded in the range $115.20 - $112.10 and closed at $112.89.

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (Aug) - Bullish above $113.65; bearish below $113.00

MCXARUN
9994500540

comex gold outlook

Gold price recovered yesterday amid weak dollar and short covering from the recent lower levels. Gold price touched a nine months low of $773.90 on last Friday and settled at $ 785.5 due to the strong dollar and fall in crude price. Dollar continued its recovery against the major currencies and recorded a six months high against the Euro on Friday.
At the same time report from World Gold Council, Global demand for gold dropped 19 percent year-on-year to 735.6 tonnes in the second quarter of 2008 as sharply higher prices and increased volatility weakened jewelry buying.

In US, Initial jobless claims for the week ending 9 August decreased by 10k to 450k, well above market expectations for a decrease to 435k vs. the revised 460k in the prior week. The 4-week average is reported at 440.5k (the highest since April 20 2002 week at 445,500) vs. the revised 421.0k (prev. 419.5k). Continuing claims for week ending 2 Aug surged higher to 3.417mn vs. the 3.303mn in previous week (prev. 3.311mn), the highest since Nov. 8 2003 week.

According to the Federal Reserve, industrial production was up 0.2% in July, better than expected, after a 0 .4% gain in June.

According to the report from EIA, gasoline stocks fell 6.4 million barrels, more than a forecast decline of 2.1 million barrels and U.S. crude inventories fell by 400,000 barrels last week, double the forecast decline. Distillate stocks unexpectedly fell by 1.7 million barrels.

At the same time, at the beginning of the month Federal Reserve held U.S. interest rates steady at 2 percent, expressing concerns about both economic growth and inflation and indicating it is in no rush to push borrowing costs higher.

International spot gold traded in the range $803.65- $789.25 a Troy Ounce and last quoted at $798.35($785.5).

Weekly Outlook (DG. OCT.)

Gold price remain weak below $816.80. But expecting some recovery from lower levels .Resistances are $791, $802, $816.80 and $829.60. Supports are $779, $772, $764, $753 and 743

Last day DGCX Gold Oct traded in the range $806– $792and closed at $802.80

TECHNICAL OUTLOOK (Intra-day)

GOLD (Oct) - Bullish above $ 803.60; bearish below $ 798.40


MCXARUN
9994500540

imp charts & outlook

click the pics to see large vie

safe trade calls

GOLD

continue to view, as long Resistance of 11550 & 11750, down rally likely to continue. for the day sell below 11325 & 11300 S/L 11350 and T/p 11240-250/ 11190-125/close below 11125 test 10950 atleast in coming days OR buy only abv 11550 S/L 11520 and T/p 11610/11670 (any time close above 11750-11950/12680/12950/13550/ 13850 bullish while close below 11125 bearish for medium term)


SILVER

continue to view as long Resistance of 20500 & 21725, down rally likely to continue. for the day sell only below 11500-475 S/L 11575 and T/p 11400/ 300/200/125/towards 18900 OR buy only abv 20000 S/L 19910 and T/p 20100/200 towards 20400. anytime close below 18900 test 18450-500 atleast in coming days (any time close below 18900 bearish rally while close above 21900/22850/25000/26100/27250/ 28000 bullish for medium term)


CRUDE

PRICE TURN EXACT FROM OUR LEVEL ON BOTH SIDE. for the day sell only below 4865 S/L 4890 and T/p 4845/ 20/4780-60/close below 4760 test 4630-50 atleast in coming days OR buy only abv 5035 S/L 5010 and T/p 5070/5120 (now crude need to close above 5130/ 5475/5710/6375 for bullish rally while close below 4760 bearish for medium term)


COPPER

continue to view, as long Resistance of 325.5, down rally likely to continue. for the day sell below 315 S/L 316.5 and T/p 313.9/312/sustain below towards 308-305 OR sell ard 324.5-325 S/L 325.5 and T/p 323/ 320.75/318.75 (upside strong rally only on close above 325.5/336.5/351/360..5/371/387.5/398 while close below 302/289/265/251.5/ 235 bearish for medium term)

MCXARUN
9994500540