Weekly View on Bullion

FUNDAMENTAL COMMENTS AND VIEW

Gold fell sharply on last Black Monday to touch $865 on back of the news of the UK official at G20 Meeting proposing of the IMF to sell 403 tonnes gold reserves in order to raise cash in G20 Meeting last week. Silver prices also fell Rs 1000 in a single day. But it was overdone and prices started recovering rest of the week due to weak economic data released. US Consumer confidence slipped in March as people fretted about rising job losses and a deepening recession. Federal Reserve officials feared the U.S. economy might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending, making credit tighter in a weak financial system, minutes of the Federal Reserve’s March meeting show

Another round of negative news of US economy was released on Thursday. The number of continuing jobless claims - those drawn by workers collecting benefits for more than one week in the week ended March 28 - surged another 95,000 to 5,840,000, the highest level since the government started keeping track in 1967. Continuing claims have risen 12-straight weeks and are up well over one million since the start of the year. The unemployment rate for workers with unemployment insurance rose 0.1 percentage point to 4.4%, a 26-year high.

According to Gold Survey 2009 released by GFMS Ltd on Tuesday, it revealed, Gold will re-attain the $1000 mark in the coming months and even break the $1,100 barrier. It also stressed that Global gold mine supply contracted by almost 3% in 2008 resulting in production levels falling to a 12-year low and Indonesia output decreased by 35%, South Africa, 14% and Australia 13%.

Demand is likely to pick up in India in coming days to marriage season and festivals coming through and lower prices will attract buying in this counter. Kerala, Assam and some other north-eastern states will celebrate Vishu (Bihu) in a big way on April 14, and that is an auspicious occasion for people to start new things or buy gold. Again, Akshaya Tritiya, India’s two biggest gold-buying festivals along with Dhanteras, falls on April 27 when citizens, especially in the south, are expected to buy gold regardless of price, as they believe it will ensure lasting prosperity.


TECHNICAL VIEW
COMEX Gold has support at $865 and resistance at $890 and $905.
Buy MCX Gold (Jun) above 14450 SL 14200 Tgt 14750

COMEX Silver has support at $12 and resistance at $13
Buy MCX Silver (May) above 20750 SL 20350 Tgt 21150 and 21450