Weekly View on Commodity

Bullion

The Labor Department reported the U.S. unemployment rate hit 7.6% in January, the highest since 1982. Economists had expected an unemployment rate of 7.5%. The Federal Reserve has cut its key interest rate to near zero in order to boost the economy, and the Bank of England lowered its benchmark rate to a record low of 1% on Thursday. Gold continues to benefit from destructive monetary policies which are being pursued globally.

Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, gained to a record for the 11th time in more than two weeks, according to figures on the company's Web site. The fund held 867.19 metric tons of bullion as of yesterday, compared with 8.09 tons when it began Nov. 18, 2004.

Hopes rose that the U.S. will pass a stimulus plan quickly after the Labor Department reported Nonfarm payrolls shed 598,000 jobs, the largest amount since 1974. The U.S. stock market rallied Friday amid hopes bad economic news is already priced in, and that the stimulus plan will boost the economy by the end of the year. The U.S. Senate is slated to vote early next week on an economic stimulus package totaling at least $780 billion that President Barack Obama said is needed to prevent the economy from sinking into a deeper recession.

Dubai gold jewellery sales have reportedly crashed in January as high bullion prices and the economic crisis hit tourism arrivals despite heavy promotional activities during the annual Dubai Shopping Festival (DSF) taking place from 15 January-15 February. Sales have crashed by over 60% in January.

COMEX Gold has support at $900 and resistance at $930 and $950.
Buy MCX Gold (Apr) above 14400 SL 14100 Tgt 14650
Sell MCX Gold (Apr) below 14100 SL 14380 Tgt13800

COMEX Silver has support at $12.7 and resistance at $13.8
Buy MCX Silver (Mar) above 20550 SL 20000 Tgt 22200
Sell MCX Silver (Mar) below 20000 SL 20500 Tgt 19500 and 19200

Energy

Downside continues in crude oil with monotonous choppy trading sessions through out the week. Despite poor economic data prices manage to steady above $40 due to significant production cut by OPEC on agreed quota.
The unemployment rate rose to 7.60% at 18 years high in U.S. The jobless number is also lowest since 34 years signaling that the recession in the world’s biggest energy- consuming country is deepening. The OPEC is implementing pledged production cuts and is committed to restoring balance to the market as the spreading recession reduces demand for oil. The Organization of Petroleum Exporting Countries is going to keep oil shipments steady at a five-year low in the next four weeks.
Natural Gas prices continue to trade higher despite lower crude oil prices. Natural Gas prices rose on lower temperature and on speculation that government efforts to boost the economy gas will increase fuel use. Some refiners switch to summer grade product from winter grade expecting demand in summer season as the future contract is trading lower as compare to previous year April contract.
The president Obama’s stimulus package will definitely help to boost the prices but if we look at the world economic condition, the picture is more darken. The recession is getting deepen and more and more countries are coming under effect. The current going “contago” is also a major worry for oil prices as prices are trading around $5 above the current contract. Support for crude oil lies near $37 and $35.

Sell MCX Crude Oil (Feb) below 1930 SL 2030 TGT 1830 & 1810