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Thursday, March 08, 2007

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Bullion Report

Feb 27 2007 9:35AM
27th Feb 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold prices continued climb higher on the back of high crude oil prices and increasing appeal of the metal as a safe-heaven investment. In London spot markets gold was offered $2.85 stronger at $686.6 per troy ounce.

More central banks are seen cutting their holding of US dollar. Italy, Russia, Sweden, Switzerland have made "major adjustments" in foreign-exchange holdings favoring the euro and the pound.

Large non-commercials increased their net long position in Comex gold.

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

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Gold gains momentum aided by firm oil.	Bulls
2.	Central bank cutting US dollar holdings.	Bulls
3.	Large non-commercials up net long position.	Bulls
4.	Comex warehouse stock unchanged.	Bears

EVENT WATCH: (Monday)

Japanese automakers Jan global output

EU finance ministers meeting, Brussels

US Jan revised building permits, advance durable goods, state and local building permits, Feb consumer confidence, Jan existing home sales

TECHNICALS

Gold Charts are showing firmness in the market, however long candlestick shows tentativeness at higher levels. The prices closed well above short term EMAs, which supports bulls. Rising MACD in positive zone shows increasing bullish momentum. Stochastic is also positive in neutral region. The prices are likely to show positive inclination.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-April	Buy	> 9810	9875	9900	9775	9729	9781	9837	9900	9940

SILVER

FUNDAMENTALS

Silver prices raced ahead to nine months high on strong crude oil prices, firm trend in gold and other base metal prices. In London spot trades silver was offered 4 cents stronger at $14.65 per troy ounce.

Large non-commercials increased their net long position in Comex silver to 46,428 lots.

Comex warehouse stocks eased 482,360 troy ounces to 116.016 million troy ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver firms up on stronger commodity prices.	Bulls
2.	Large non-commercials up net long position.	Bulls
3.	Comex stocks remain unchanged.	Bears

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver is looking positive at the stage, however long shadows of candlestick show indecision at higher levels. The prices closed well above short term EMAs, which shows the firmness in the market. MACD is moving upward in positive region, which indicates increasing bullish momentum. However, stochastic is positive in overbought region. The prices are likely to show volatility at higher levels.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Mar	Buy	> 21005	21205	21280	19900	20725	20885	21105	21285	21400

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 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

Mar 5 2007 11:27AM
5th March 2007 Bullion Report
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

Mar 3 2007 9:43AM
3rd March 2007 Bullion Report
Gold prices plunged on the last trading day of the week on concerns of global slowdown and weakness in demand in Asia

Mar 2 2007 9:40AM
2nd March 2007 Bullion Report
Markets looks all set to reverse the trend as bargain hunting begins later in the day

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