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Tuesday, February 13, 2007

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Bullion Report

Feb 5 2007 10:45AM
5th Feb 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold futures retreated lower after coming in striking distance of $660 mark, which is also a strong resistance level. London spot market experience strong correction and was offered more than $10 lower at $647.00 per troy ounce.

Meanwhile, weaker-than-expected payroll data from the Labor Department triggered a fall in the US dollar.

The People's Bank of China (PBOC), China's central bank, governor Zhou Xiaochuan said that China has concrete plans to diversify its forex reserves and gold is definitely one of the candidates for the bank..

Comex warehouse stocks rose 32,150 ounces to 7,491,315 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Gold drops as trader took to profit taking.	Bears
2.	US dollar falls against leading currencies.	Bulls
3.	China to diversify forex reserves.	Bulls
4.	Comex warehouse stocks up 32,150 ounces.	Bears

EVENT WATCH: (Monday)

§ Taiwan Jan CPI, end-Jan forex reserves

§ US, EU open skies talks scheduled for this week

§ US Jan ISM Services

TECHNICALS

Gold is trading sideways. Prices have failed to pierce above the falling EMA’s indicaing lack of strength at higher levels. The RSI and stochastic are rising from oversold regions, indicating that some recovery may be seen despite short term weakness. Prices might see initial weakness followed by late recovery.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-April	BUY	> 9350	9410	9435	9320	9297	9236	9368	9437	9481

SILVER

FUNDAMENTALS

Silver prices retreated lower as bullion complex melted on profit taking. In London spot market silver was offered 36 cents lower at $13.35 per troy ounce. Comex March silver eased 36 cents to $13.36 an ounce as traders decided to take profit.

Base metal prices faded lower as traders and speculators stayed away from the market. While inventory worries is seen dragging down copper, there is no sign of pick in the Chinese demand.

Comex warehouse stocks fell 34,164 ounces to 113,935,516 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver retreats as bullion complex turns lower.	Bears
2.	Soft trend in the base metal prices.	Bears
3.	Comex warehouse stocks down 34,164 ounces. Bulls	Bulls

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver charts are also giving mixed signals. The prices managed to stay above 18-days EMA, which indicate medium term trend is still bullish. Rising MACD in positive zone indicate increasing bullish momentum. However, stochastic is negative in neutral region. Prices are likely to see some volatility.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Mar	BUY	> 19695	19800	19930	19625	19429	19517	19696	19931	20106

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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