Market Commentary

Ø Gold opened unchanged at 1786/1787 and quickly bumped up to its intraday high of 1786.25/1787.25. The metal started a downward spiral at the p.m. fix as Fed Chairman Mr. Bernanke’s remarks offset better than expected economic data. As investors looked upon the comments as negative, strong selling, which triggered a series of stops, took the metal to its intraday low of 1707/1708 mid session. Gold ended the day at 1709.50/1710.50.

Ø Silver opened a little higher at 37.20/37.25 with it reaching an intraday high of 37.48/37.53 mid morning. Resting stops near 36.80, 35.85 were triggered as the metal collapsed alongside other commodities eventually reaching its intraday low of 33.85/33.95 mid session. Struggling to regain lost ground, silver closed the day at 34.52/34.57

Technical Commentary:

Ø Gold collapsed today, closing near the intraday lows at 1709/10, after a big outside day (i.e., range much wider than yesterday). The close broke our uptrend support levels, as well as closing well below the last interim low. RSI confirmed the change in trend by moving sharply down to 44.86, from yesterday’s levels just below 70. Lastly the MACD generated a sell signal. The 1700 level is a key support level, as gold has not traded below this level since January 25th. We expect a breach of this support level to bring in more sellers. Now that the December – February uptrend has been breached, it acts as resistance. Uptrend resistance is currently at 1750.

Ø It was an even uglier day for silver, which closed down at 34.52/57, also after a big outside day. However, silver did manage to hold the it’s short term uptrend support (off the Dec 29th low), currently around 34.37, on a closing basis. What was notable in the silver techs was the strong rejection at 37.31, which is the 61.8% Fibonacci retracement level of the August to December downtrend. Key support is at 33.00, which has held on a closing basis since January 25th. The Gold-Silver ratio also had a big outside day, trading in a range of 47.67 to 50.12. The outside day is frequently a reversal warning; so a higher close tomorrow would bring in buyers of the ratio (i.e., for gold to outperform silver, reversing the current trend).

Technical levels for 1^st Mar, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,659.86	1,762.21
Silver	33.352	36.727

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
1st Mar	ISM Manufacturing PMI	USD	Pending at 8:30pm	54.6	54.1	If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
29th Feb	Prelim GDP q/q	USD	3.0%	2.8%	2.8%	As Actual > Forecast = Good for currency. Annualized change in the value of all goods and services produced by the economy 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.