This day, This month, Markets and Moods

8 th august 2012

Gold and Silver : A day traders Market : Gold opened slightly higher at $1614, but failed to hold on to the upward momentum and closed around $1611. it was another quiet and low volume day and investors put on more risk with other asset classs as the dollar index get weaker. Gold reached its intraday high of $1617 shortly after opening and gradually gave up its gains on profit taking. After that the metal made a intraday low of $1608. Similarly silver opened higher at $28. solid gains in base metals especially copper helped the white metal to reach its intraday high of $28.23 but failed to hold on there ; end of the day silver closed at $28.08. Once Again lack of any fundamental-based impetus, precious metals are largely looking to the dollar index vs Euro for direction. There is a growing optimism among the market players that the European Central Bank will act to lower borrowing costs for Spain and Italy ; this could be supportive for the euro market and thus induce a risk on rally in equities but Worse-than-expected German factory orders numbers (-1.7% m/m, compared to consensus of -0.8% m/m) could put some downward pressure on the euro, and consequently on precious metals and other commodities. Key short term technical area: Gold is continuing its side ways trend of the past several months. A break of $1585 to the downside or $1640 to the upside could be decisive. Same thing is applicable for silver as the ranges are $26.50 and $28.40. Macro-views: Over a longer period gold has tended to correct and consolidate after each major move ; such phases have lasted from 6 to 12 months and. The primary difference now is the all round view of many fund managers and analysts around the world that share certain bullish under-currents. These perceptions are underlined by financial repression (low bond market interest rates) and a de-leveraging deflationary cycle in the developed markets, political economic troubles in euro-zone, geo-political tension escalating in middle east / west asian countries, inflation across the emerging markets(especially India- a major gold buyer during the upcoming festive + wedding seasons). If you add the perceptions coming from deficits in production, central bank buying and most interestingly a build-up of shorts at Comex you are confronted by an explosive mix of bullish threads !!! Bullllliion Bu lio n Bu on Commodity Gold Silver INR/USD MCX Gold MCX Silver Month Spot Spot Spot Aug Sep High Low Close Previous % change Close $1,616.80 $1,608.30 $1,611.10 $1,610.80 $28.23 $55.51 29998 53497 $27.74 $55.07 29756 53261 $28.08 $55.08 29767 53368 $27.78 $55.52 29928 53344 0.02% 1.08% -0.79% -0.54% 0.04% 7days EMA $1,606.90 $27.70 $55.50 29,855 53,315 7days RSI 58 60 36 47 54

Commodity Gold Silver INR/USD MCX Gold MCX Silver

Month Spot Spot Spot Aug Sep

S1 1607.33 27.80 54.93 29682.67 53253.67

S2 1603.57 27.53 54.78

Pivot 1612.07 28.02 55.22

R1 1615.83 28.29 55.37

R2 1620.57 28.51 55.66

Daily Trend Neutral Neutral Neutral Neutral

29598.33 29840.33 29924.67 30082.33 53139.33 53375.33 53489.67 53611.33

Crude Oil: Support for crude oil, and commodities in general, remained in place yesterday with positive sentiment around the Euro zone (Spanish and Italian bond yields have eased lower) helping to sustain Fridays rally. Brent (front month) gained almost $2.55/bbl yesterday, closing at around $112/bbl. Its currently hovering just above $111.8/bbl. WTI managed to stay well above $90/bbl, ending the day at $92/bbl a $1+ gain for the day. The spread between the two crudes has widened very fast from around 10$ per barrel to 20$ last night.............. Key technical area for WTI : As per our previous report and prediction, crude is moving up every single day.... Upside resistance is at 93.50 and then around 96-97$ range . A close above this will be a break out. Support is now poised at 92-90$ range with major struggle around 87$. Macro Views......Crude oil markets have also been supported by escalating troubles in Syria and fears that unrest there could spill over into other parts of the region. Egypt once again finds the transition to full fledged democracy tough with reports violence and tension between the elected representatives from the Islamic Brotherhood and thr long ruling secular military groupings. A bombing of the pipeline from Kirkuk in Turkey has also added to supply concerns, as well as a fire at Chevrons Richmond refinery, the largest in northern California. Furthermore, tropical storm Ernesto which is headed towards the Bay of Campeche, an area where most of Mexicos crude oil production comes from, is reportedly intensifying. As we enter the hurricane season in South and South eastern America, traders and hedgers will be nervously eyeing the Mexican gulf production zone. As grains markets have shown us in prices of Corn and Soybean recently that a weather premium can rapidly add to the markets concerns and push prices much higher very quickly. Once again Brent is leading the charge, this time its Iran that is the driving force and not Libya. Many traders are eyeing the upcoming American elections warily as really aggressive traders are betting on some kind of a trigger prior to the November countdown. They are perhaps influenced by the emerging reports from Debka file, an Israeli website claiming that Syrian security has assassinated Saudi Prince Bandar Bin Sultan , the recently appointed Intelligence boss in Riyadh. The former Saudi ambassador to USA and nephew to the Late King Fahd, Prince Bandar is credited by intelligence sources for masterminding the explosive assassination in Damascus of the highest ranking security bosses and the inner circle around Bashar Assad (as quoted in the Debka file reports)...............An Iran-Syria Hezbollah conflict with Saudi US EU axis could set up an explosive situation

Daily Market movement at a glance( Source : Bloomberg)

Influential upcoming News Time 3.30 pm Tentative 6.00 pm 8.00 pm 10.30 pm Zone EUR EUR USD USD USD Economical Data German Industrila Production m/m Greman 10 Y bond auction Prelim Unit Lebor Cost q/q Crude oil Inventories 10 Y Bond Auction 0.004 -0.6 M Actual -0.008 Exp 0.016 1.31/1.5 0.013 -6.5 M 1.46/3.6

Shamik Bhose<Executive Director> Commodity & Currency & Interest rate futures Markets Microsec Commerze Limited

This day, This month, Markets and Moods 9th August 2012

Gold and Silver: Ranged and holding pattern Precious metal prices like other assets and commodities, continues to trade with an unclear trend. Range-bound , edgy and volatile............ The price of gold edged up slightly on Wednesday closing by 0.02% to $1616, while silver slipped by 0.04% to $28.08. Comex open interest looks weighted in line of shorts. A trigger could set things up for bullion markets, habitually comfortable with up-trends post August as all the festival and ceremonial demands crowd into the last quarter of the calendar. Key technical area: Gold closed nearly unchanged at $1613. Precious metals prices remain in a relatively tight range with volumes traded reduced to half of the usual average seen across all markets. The range of $1585 to $1629 continues to hold and the ADX, a measure of trends , is very low at 11.70. silver also closed nearly unchanged like gold at $ 28.10 and shows no trend momentum as ADX is once again well below 20........THE STAGE LOOKS SET FOR SOMETHING TO HAPPEN !! The Euro along with other risk currencies depreciated against the USD. Euro/ USD closed on Wednesday by at 1.2365........failure to go below 1.21 or above 1.2450 suggests ranged pattern has set in, the volatility caused by remarkable remarks from EU politicians, bankers and leading lights. The confusion among Eurocrats is adding to the existing sense of chaos coming out of Greece, Spain and Brussels with Italy poised to join in......... The Tragedy continues or is it the farce now ? Greece has pledged a series of new fiscal and reform measures worth 11.5 billion euros to convince international lenders to keep Athens hooked to a 130 billion euro lifeline and avoid bankruptcy. Inspectors from the troika, IMF, the European Commission and the European Central Bank - concluded a visit to Greece on Sunday saying the talks with the new coalition government were productive. Ratings agency Standard & Poor's revised Greece's outlook to negative, saying the debtridden euro zone country could need more help from its international creditors. "Following delays in implementing budgetary consolidation measures and a worsening Greek economy, we believe Greece is likely to require additional financing for 2012 under the EU/International Monetary Fund (IMF) program," S&P said in a statement. "We are revising the outlook on the long-term ratings on Greece to negative, reflecting the possibility of a downgrade if Greece fails to secure the next disbursement of the EU/IMF Program," S&P said. Greece has made progress in finding budget cuts needed to continue its bailout program, but international inspectors said this week that they will return in September to see if the remaining work is done. The bullion complex has largely ignored calls by the Boston Fed President Rosengren that the Fed should commit to unlimited quantitative easing. Traders with a Nasty sense humour called this the Krugman Krugpot effect. If the Rosengren theory becomes conventional wisdom (Ben Bernanke being already similarly inclined ),it will be impossible to correctly price risk

Bulllliion Short Term Bu on Short Term Commodit y Gold Silver INR/USD MCX Gold MCX Silver Mont h Spot Spot Spot Aug Sep 53620 Month Spot Spot Spot Aug Sep 53087 S1 1604.17 27.70 55.11 53409 S2 1596.63 27.41 54.80 53368 Pivot 1610.43 27.98 55.26 R1 1617.97 28.27 55.57 R2 1624.23 28.55 55.72 Buy Neutral Daily Trend Buy Neutral High Low Close Previous Close $1,611.1 0 $28.08 $55.08 29767 % change 0.04% -0.28% 0.60% 0.43% 0.08% 7days EMA $1,609.6 0 $27.90 $55.38 29,865 53,338 7day s RSI 64 65 39 59 55

$1,616.7 0 $28.25 $55.42 29919

$1,602.9 0 $27.68 $54.96 29783

$1,611.7 0 $28.00 $55.41 29896

Commodity Gold Silver INR/USD MCX Gold MCX Silver

29813.00 29730.00 29866.00 29949.00 30002.00 53124.00 52839.00 53372.00 53657.00 53905.00

Crude Oil: WTI Crude oil enjoyed another day of gains yesterday, as hopes of further central bank easing and increasingly positive sentiment around the Eurozone remained in place. A fire at a Chevron Corp refinery in California helped to push up crude prices. Hurricane Ernesto is forecast to re-emerge Wednesday in the southern Gulf of Mexico, where state oil company Pemex has port facilities and offshore platforms and this could badly affect the US market sentiment though stocks are aplenty.

EIA inventory summary: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.7 million barrels from the previous week. At 369.9 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. EIA also raised its forecast for 2012 world oil demand growth by 90,000 bpd to 760,000 bpd. It raised its 2013 demand growth estimate by 140,000 bpd to 870,000 bpd.

Market movement inversely to the USDX - at a glance (Source Bloomberg)

News
Time 1.30 pm 1.30 pm 6.00 pm 6.00 pm 7.30 pm 8.00 pm 10.30 pm Zone EUR EUR USD USD USD USD USD Economical Data ECB Monthly Bulletin Italian Trade Balance Trade Balance Unemployment Claims Wholesale Inventories m/m EIA Natural Gas Inventory 30 Y Bond Auction 0.97B -47.4B 371K% 0.003 30B 1.01B -47.8B 365K% 0.003 28B 2.58/2.7 Actual Exp