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Bullion Report

Feb 14 2007 9:20AM
14th Feb 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold continued to strengthen further on wider US trade gap for December. In London spot market gold was seen advancing towards $670 mark. It was offered $6.15 higher at $667.80 per troy ounce.

GOLD sales in the UAE reached Dhs8.1 bn in 2006 against Dhs6.4 bn in 2005, a rise of 26%, World Gold Council said. Gold sales are likely to touch Dhs9 bn in 2007.

Canadian gold producer Yamana Gold has declared commercial production at its flagship Chapada copper-gold mine in the state of Goias, Brazil. Chapada is expected to produce over 210,000 mt copper-gold in 2007.

Comex warehouse stocks unchanged at 7,487,683 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Widening of US trade gap.	Bulls
2.	UAE gold sales rose 26% in 2006.	Bulls
3.	Canada's Yamana gold starts production.	Bears
4.	Comex warehouse stocks remain unchanged.	Bears

EVENT WATCH: (Monday)

Australia's Westpac Feb consumer sentiment survey

Japan Dec balance of payments, revised industrial production

South Korea Jan jobless rate

Singapore Q4/FY GDP

US Jan advance retail sales, Dec business inventories

TECHNICALS

Gold is showing tentativeness at higher levels as depicted by the long upper shadow of the candlestick. However, close above the short term EMAs suggests firmness in the market. Rising MACD in positive zone indicate increasing bullish momentum. Stochastic is also positive in overbought region, which warrants some caution to bulls.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-April	Buy	>9530	9570	9595	9505	9445	9488	9531	9595	5637

SILVER

FUNDAMENTALS

Silver prices remained upbeat boosted by strong trend in the precious metals complex. In London spot market silver quoted 21 cents lower at $13.92 per troy ounce.

Poor industrial demand during second half of 2006 is likely to have caused 3% drop in silver fabrication demand to nearly 28 Moz (860 tonne) from 2005’s. In 2007, demand is expected to fall due to the slower growth in global industrial production.

Comex warehouse stocks rose by 599,378 ounces to 115,437,975 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver firm on advancing gold.	Bulls
2.	Poor industrial demand in 2007.	Bears
3.	Comex warehouse stocks up 599,378 ounces.	Bears

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver charts are giving mixed signals. The prices closed above EMAs suggest that the firmness is intact. Rising MACD in the positive zone also shows increasing bullish momentum. However, stochastic has made bearish crossover in overbought region. The prices are likely to show volatility with positive bias.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Mar	Buy	> 20200	20350	20450	20100	19890	20059	20223	20460	20566

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|
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