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Bullion Report
Mar 20 2007 9:31AM
20th March 2007 Bullion Report

GOLD
FUNDAMENTALS  
Gold futures edged marginally higher in a lack luster trading session Monday as weakness in crude oil prices and strength in greenback capped the gains. Gold for April delivery at NYMEX added 40 cents to close the session at $654.2 an ounce levels, the contract meanwhile saw the lows of $652.80 an ounce.

The market is consolidating after recent plunge and seems waiting for some good positive news. The market is closely watching the developments in currency and energy markets. In this regard Fed’s decision o interest rates would be important for the direction ahead. The Federal Open Market Committee is starting its two-day policy meeting on Tuesday.

Meanwhile, in geopolitical tensions over Iran’s nuclear issue is still supportive for the metal. The UN Security Council is likely to impose new sanctions against Tehran in its meeting this week.

COMEX warehouse stocks remains unchanged at 7.55 million troy ounces.

TUG-OF-WAR: Bulls vs. Bears
No.
Pressure Point
Favours
1.
Central banks gold sales to decline further in 2007: CPM Group’s Gold Year Book Bulls 
2.
Inflation concerns Bulls  
3.
Gold sales by central banks declined in 2006. Bears
4.
Comex warehouse stocks remains unchanged Bears


EVENT WATCH: (Monday)
Bank of Japan Target Rate, German Producer Prices (Feb),
US Housing starts (Feb)
Building permits (Feb)
 
TECHNICALS
Prices closed above 9-days EMA, which is a positive sign. MACD is running upward in negative zone, indicating decrease in bearish momentum. RSI is positive in neutral region. However, doji formation of candlestick shows indecision in the market sentiments. The prices are likely to show volatile movements with positive bias.
   
TRADE RECOMMENDATION
 
Contract
Call
Entry
T1
T2
SL
S2
S1
PCP
R1
R2
MCX-April
Buy
>9360
9430
9450
9325
9258
9330
9385
9452
9482





SILVER
FUNDAMENTALS  
Silver also recouped marginally on the first trading day of the week following the slight firmness in yellow metal and copper; however weakness in crude oil prices capped the gains. Sliver futures for May delivery at COMEX added 1.8 cents to close the session at $13.233 an ounce levels.

May copper at NYMEX added 1.05 cents to close the session at $3.0215 a pound, the contract's fresh three months high.

COMEX stocks remain unchanged at 19.67 million troy ounces.

TUG-OF-WAR: Bulls vs. Bears
No.
Pressure Point
Favours
1.
Subdued physical demand Bears
2.
Firmness in copper Bulls
3.
COMEX stocks remains unchanged at 19.67 million troy ounces. Bears


EVENT WATCH:
Covered under gold section.
 
TECHNICALS
Silver is looking slightly positive as the prices closed above 9-days EMA. MACD is running upward in the negative territory, which indicates decrease in bearish momentum. Stochastic is also in favor of bulls in neutral region. The prices are likely to see range bound movements with positive bias.
   
TRADE RECOMMENDATION
 
Contract
Call
Entry
T1
T2
SL
S2
S1
PCP
R1
R2
MCX-May
Buy
>19500
19650
19750
19400
19362
19416
19552
19760
19900
 
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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