Market Commentary

Ø Gold opened a little higher at 1621.10/1622.10. Trading erratically after positive jobs data, gold reached an intraday high of 1631/1632 early morning. Giving up its gains on profit taking as equities declined, the metal reached an intraday low of 1608.10/1609.10 mid morning. Bouncing up with renewed fund buying, gold then became range bound for the remainder of the session and eventually closed the day at 1616/1617.

Ø Silver opened almost unchanged at 29.32/29.37 and quickly reached an intraday high of 29.46/29.51 after jobs data. Tracking profit taking in crude and base metals, silver reached an intraday low of 28.58/28.63 mid morning. A recovery however, alongside gains in base metals, was tempered by declines in crude and as such silver closed the day at 28.71/28.76.

Technical Commentary:

Ø Gold is closing as an up week at 1617. This is the first higher close following 4 down sessions. The metal remains above its 3 year bullish support that now lies at 1544. Further support is seen at last week’s low of 1523. Short term indicators suggest that Gold is weak technically, with initial sell level seen at mid December high 1641. We will remain bearish while Gold closes below the 200 day moving average at 1633.

Ø Silver made a nice recovery this week to 28.72. The 26.10 to 26.40 level provided major support for Silver on three occasions in 2011. While Silver remains below 30.71 we see risk of another leg down to that support area. A break of 26.00 opens 100% reversal to the 17.77 area. The Gold Silver ratio is closing the week at 56.31. The ratio tried to move back below critical 61.8% Fibo support at 54.35 but the downside was rejected. We see a move for the ratio to 59.70 the 76.4% Fibo of last year’s big 68.35 to 31.69 down move. While 54.35 holds we see down side risk for both Gold and Silver. The price action suggests that we remain in a bearish cycle for these precious metals.

Technical levels for 9^th Jan, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1600.43	1629.39
Silver	28.267	29.409

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
9th Jan	German Industrial Production m/m	EUR	Pending at 4:30pm	-0.5%	0.8%	If Actual > Forecast = Good for currency. Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
6th Jan	Non-Farm Employment Change	USD	200K	152K	120K	As Actual > Forecast = Good for US Currency. Change in the number of employed people during the previous month, excluding the farming industry has Increased.
6th Jan	Unemployment Rate	USD	8.5%	8.7%	8.6%	As Actual < Forecast =Not Good for US Currency. Percentage of the total work force that is unemployed and actively seeking employment during the previous month has Increased.

Disclaimer:

This report contains the opinion of the author, which is not to be construed as investment advices. The author, Directors, other employees of RiddiSiddhi Bullions Ltd. and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information, which is believed to be accurate, and no assurance can be given for the accuracy of the information. The author, directors and other employees and any affiliates of RSBL cannot be held responsible for any losses in trading. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by or from RSBL that the reader or client will profit or the losses can or will be limited in any manner whatsoever. Past results are no indications of future performance. Information provided in this report is intended solely for informative purposes and is obtained from sources believed to be reliable. The information contained in this report is no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. We do not offer any sort of portfolio advisory, portfolio management or investment advisory services. The reports are only for information purpose and are not to be construed as investment advices.