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Bullion Report

Jan 29 2007 9:12AM
29th Jan 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold retreated lower from a five-month high as softer energy costs reduced metals appeal as a hedge against inflation. Also, the recovery in US dollar against euro, yen pressured gold prices. Slowing demand from India has also affected gold prices. In London spot market gold was offered $2 lower at $644.3 per ounce.

Gold Fields settled months of speculation about its capital needs with the announcement of plans to raise $1.2bn through a private placement of shares with institutions.

According to statistics, sales of DSF 2007 gold coupons till date are 387,487 compared to 291,000 in 2005.

Comex gold warehouse stocks were unchanged at 7,463,524 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Gold falls on receding oil prices, firm dollar.	Bears
2.	Gold Fields approaches Institutions $1.2bn.	Bears
3.	DSF boosts gold coupon sales.	Bulls
4.	Comex warehouse stocks unchanged.	Bears

EVENT WATCH: (Monday)

World Economic Forum (WEF), Davos

US Q4 housing vacancies and homeownership, Chicago Fed Midwest manufacturing index

TECHNICALS

Gold is continuing its upward journey. The prices closed well above EMAs, which suggests bullish trend is intact. MACD is about to enter in positive zone and is supporting the medium term uptrend. However, overbought levels of stochastic warrants some caution on the part of bulls. Prices are likely to move with positive bias.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Feb	Buy	> 9250	9290	9320	9220	9155	9192	9249	9321	9380

SILVER

FUNDAMENTALS

Silver prices eased a bit perfectly in tune with declining gold prices. The metal is also witnessing liquidation pressure after peaking on Tuesday. In London spot market silver was offered at $13.29 per troy ounce, down 2 cents.

Soft tone in the copper futures in New York and on LME would continue to apply check on silvers movement.

Comex warehouse stock rose 597,554 ounces to 114,757,944 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver comes under selling pressure.	Bears
2.	Soft tone in the copper futures	Bears
3.	Comex warehouse stocks up 597,554 ounces.	Bears

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver is also continuing its bullish trend. The prices closed above EMAs, which shows uptrend is intact. Stochastic are positive in overbought region, which warrants some caution on the part of bulls. MACD is continuing its rising trend in negative territory, which indicates decreasing bearish momentum. The prices are likely to show positive inclination.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Mar	Buy	> 19850	19950	2050	19780	19473	19631	19843	20100	20280

DISCLAIMER
This report is prepared exclusively for Reliance Commodities by Indian Rural Market Products Pvt Ltd (IRMPL). The information and opinions contained in the document have been compiled from sources believed to be reliable. IRMPL does not warrant its accuracy, completeness and correctness. Use of data and information contained in this report is at your own risk. This document is not, and should not be construed as, an offer to sell or solicitation to buy any commodities. IRMPL and its affiliates and/or their officers, directors and employees may have positions in any commodities mentioned in this document (or in any related investment) and may from time to time add to or dispose of any such commodities (or investment).

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Equities: Trading through Reliance Securities Limited | NSE SEBI Registration Number Capital Market :- INB 231234833 | BSE SEBI
Registration Number Capital Market :- INB 011234839 | NSE SEBI Registration Number Derivatives :- INF 231234833 Commodities : Trading through Reliance Commodities Limited | MCX member code: 29030 | NCDEX member code: NCDEX-CO-05-00647|
NMCE member code: CL0120 Mutual Funds : Reliance Securities Limited | AMFI ARN No.29889
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