BULLION REPORT

[Current Scenario in Bullion]

As per technical views are concerned Gold and Silver have been
climbing pretty well since last few weeks. It wasn’t just the technical
analysis signal but it also had fundamental support as there were global
economic concerns in everyone’s mind. As the global economic conditions
were rising, gold and silver also called as “Safe Haven Currency” were being
bought in huge quantity by investors to hedge their portfolio and it can be
also termed as shift of volume from risky assets to safe assets. When
Greece, Portugal and Spain were being saved by the IMF and ECB
(European Central Bank) all investors were considering it as a sign of
recovery in global markets, but it wasn’t the case.

At the same time few months back Base metals were hit hard by all
these global economic concerns and were trading at 52 week lows. But in
the recent weeks as the news of recovery in global economy started to come,
base metals started to cover the grounds as much as possible but still they
were left behind by Bullion.

Kundan Narkhede.
Research Analyst, Commodities
[October 19, 2010]

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GOLD & SILVER

Gold and silver also referred to as “Safe Heaven Currencies” as they are precious
metals. Gold made high of $1387 per ounce and Silver made high of $24.90 per ounce, which
are their life time highs. This could explain a little about the risk which is involved in the
global markets. As investors and ETFs are buying bullions to hedge their portfolio. Currently
developed countries like US and China are taking steps to bring the economy back on track,
which has led them to monetary tightening. Whereas Ireland is in trouble again and
Ireland’s government bonds rating are also being downgraded which has given boost to the
bullion to go up.

GOLD
There was time few
months back when gold was
struggling near $1157 per ounce Gold & Silver has touched
in the end of July; only few highest level recently and they
analysts expected that gold could are still trading near to it, when
climb up to $1387 per ounce. Then global economy is still in trouble.
news came around regarding Call
Options which were being bought
by investors in COMEX for the strike price of $1500 per ounce. News from the developed
countries wasn’t that good to support risk class assets. Global Economy was looking
vulnerable and investors started to diverse their portfolio by buying gold. As gold has already
touched the lifetime high of $1387 per ounce, investors are still expecting some upward
movement.

As of now gold is trading around $1350 to $1370 per ounce and investors are booking
profits around these levels, which could mean only one thing that is; investors are still
interested in buying yellow metal. And we personally expect it to touch highs in range of
$1420 to $1460 per ounce in coming months. Only level which is very important in Gold is $
1325 per ounce, if gold sustains below this level could mean only one thing that is “Bear
Trend” formation.

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Silver
Silver also referred to as another safe haven currency and also a very important
metal used in the various industries. There was a time when silver was trading around $17
per ounce and it was struggling to breakout from that level. As there were economic concerns
and which was hitting hard base metals, at that point of time investors were confused
whether to buy it or to sell it. When Silver broke out of the $17 to $19 per ounce range, it was
pretty clear that silver has had good chances of touching new highs. And as economic
concerns started to grow around the globe, investors also started to buy silver; another safe
haven currency.

US government is taking steps to bringing the economy back on track; Federal

Reserve is thinking of further monetary policy tightening. Also Chinese economy has not
been improving as expected which has put investors in more dilemma about the global
markets. European side is quite a little now after the IMF & ECB (European Central Bank)
saved the countries like Greece, Spain and Portugal which were on the verge of bankruptcy.
IMF and ECB paid approximately $1 trillion. After this rescue work, as the dust of risk of
settling down then came another shocking news from the Ireland which was in trouble yet
again.

Currently silver is trading in $24 to $24.50 per ounce; we personally expect silver to
touch highs of around $25.20 to $25.60 per ounce in near future looking at the current
market conditions.

In recent news when US government took steps to bring the economy back on track
and made changes in the monetary policies, whereas china raised its lending rates which had
the negative impact on the yellow metal as well as silver. As European countries are still
trying to make up the grounds they have lost in past few months, here another developed
countries are in trouble again.

As the technical analysis speaks, we feel that the current time when gold and silver
are coming down from its recent high is just an profit booking or it can also be said as they
are making their base for further appreciation in near future.

Only level to watch for in the silver in $ 23.20 per ounce, which is very important
level and if it sustains below it for sometime then it might for bearish trend.

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Phone: +91 261 4018774 Fax: +91 261 4018774