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Sunday, March 11, 2007

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Bullion Report

Mar 3 2007 9:43AM
3rd March 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold prices plunged on the last trading day of the week on concerns of global slowdown and weakness in demand in Asia after recent volatility in the global stock markets, particularly China. Heavy long liquidation by traders pushed the prices down despite weakness in dollar and buoyant crude oil prices. April Gold at NYMEX shed 3.2% during the session to close at $644.1 an ounce.

The net supply of gold from the mining sector in 2006 amounted to 2,076 tonnes, compared with a net 2,436 tonnes in 2005 according to the latest Global Hedge book analysis.

De-hedging is likely to drop 7-8 million ounces per annum in each of 2007, 2008 and 2009, with a slight increase in 2009 before a sharp drop in 2010.

Comex warehouse stocks remained unchanged at 7,487,176 ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Concerns of slowdown in global economy	Bears
2.	US Consumer sentiments dips in late February	Bears
3.	US dollar may experience renewed pressure.	Bulls
4.	Comex warehouse stocks unchanged.	Bears

EVENT WATCH: (Monday)

None

TECHNICALS

Gold charts have turned bearish after four consecutive massive losses. The prices closed well below short term EMAs, which favors bears. MACD is heading downwards which indicates fall in bullish momentum. Stochastic is also negative in neutral zone. The prices are likely to remain on the negative side.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-April	Sell	< 9288	9250	--	9308	9213	9240	9288	9330	9370

SILVER

FUNDAMENTALS

Silver prices also copied the sharp correction in other precious metals. In London spot trades silver was offered 125 cents lower at $12.88 per troy ounce.

Copper futures for May delivery at NYMEX declined by 4.75 cents to close at $2.707 a pound. Soft tone in other base metal, crude oil prices will determine the trend in silver prices.

Comex warehouse stocks were unchanged at 117.193 million troy ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver prices to follow the gold.	Bulls
2.	Soft tone in base metal, crude oil prices.	Bears
3.	Comex stocks down 14,460 ounces.	Bulls

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver is also looking weak after four consecutive massive losses. The prices closed well below short term EMAs, which favors bears. MACD is heading downwards which indicates fall in bullish momentum. Stochastic is also negative in neutral zone. The prices are likely to remain on the negative side.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-May	Sell	< 19140	19080	19030	19190	18792	18971	19140	19364	19542

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).

Reliance Disclaimer

Previous Research Reports

Mar 10 2007 2:13PM
10th March 2007 Bullion Report
Gold futures pared the initial gains pressured by strong dollar as payrolls data signaled that the largest economy is doing well

Mar 9 2007 1:20PM
9th March 2007 Bullion Report
Gold futures continued its recent gaining streak Thursday; however the gains were capped by weakness in crude oil and stronger dollar.

Mar 8 2007 1:47PM
8th March 2007 Bullion Report
Gold futures recorded second consecutive gains Wednesday breaking the recent loosing streak on the back of bounce back in stock markets.

Mar 7 2007 9:47AM
7th March 2007 Bullion Report
Gold prices edged higher Tuesday as concerns of global economic slowdown eased after the bounce back in stock markets

Mar 6 2007 9:55AM
6th March 2007 Bullion Report
Gold prices slipped further in sympathy with sharp fall in Asian and European stock markets

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