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Thursday, March 08, 2007

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Bullion Report

Feb 28 2007 9:31AM
28th Feb 2007 Bullion Report

GOLD

FUNDAMENTALS

Gold prices corrected sharply lower, after reaching nine months highs, as traders decided to take profit. In London spot markets gold was offered $10.75 lower at $676.4 per troy ounce.

streetTRACKS gold shares set a milestone when the assets under management fund totaled approximately $10.2 billion. The fund has turn into a seventh largest ETF by assets in the US.

US dollar continues to move lower caused by increased liquidation. Recent US economic indicators have been disappointing which forced trader to expect hawkish statement from the Fed.

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

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Gold witnesses profit taking.	Bears
2.	Gold shares reaches milestone.	Bulls
3.	US dollar losses against Euro, Yen.	Bulls
4.	Comex warehouse stock remain unchanged.	Bears

EVENT WATCH: (Monday)

Australia Jan private sector credit

Japan Jan industrial production, retail sales, housing starts, construction orders, vehicle production

Euro zone Jan unemployment, Feb economic sentiment indicator, business climate indicator

US Q4 GDP, Feb Chicago Purchasing Managers Index, Jan new residential sales

TECHNICALS

Gold is showing indecision at higher levels as depicted by long shadow of the candlestick. The prices managed to close above short term EMAs, which shows firmness in the market is intact. MACD is rising in positive region, which indicates increasing bullish momentum. However, overbought levels of stochastic warrants caution. Prices are likely to see some consolidation before moving ahead.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-April	Sell	< 9800	9725	9695	9845	9674	9725	9807	9854	9885

SILVER

FUNDAMENTALS

Silver prices retraced lower following the trend in bullion markets. In London spot trades silver was offered 35 cents lower at $14.35 per troy ounce.

Copper and other base metal prices have eased lower. This is despite softer dollar and decline in metal inventory levels.

Comex warehouse stocks gained 593,412 troy ounces to 116.610 million troy ounces.

TUG-OF-WAR: Bulls vs. Bears

No.	Pressure Point	Favours
1.	Silver feels the pressure from liquidation.	Bears
2.	Base metal prices on the decline.	Bears
3.	Comex stocks gained 593,412 ounces.	Bears

EVENT WATCH:

Events covered under gold section

TECHNICALS

Silver is also showing indecision at higher levels as depicted by hanging man pattern of candlestick. The prices managed to close above short term EMAs, which shows firmness in the market is intact. MACD is moving upward in positive region, which indicates increasing bullish momentum. However, overbought levels of stochastic warrants caution. The prices are likely to see some consolidation before moving ahead.

TRADE RECOMMENDATION

Contract	Call	Entry	T1	T2	SL	S2	S1	PCP	R1	R2
MCX-Mar	Sell	< 20925	20725	20600	21045	20395	20581	20946	21096	21219

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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