Market Commentary

Ø Gold opened slightly lower at 1708/1709. The metal slipped a little lower on neutral economic data, reaching its intraday low of 1702/1703 shortly after the open. Strong buying interest at the p.m. fix saw gold recover to an intraday high of 1724.50/1725.50. Range bound for the remainder of the day saw gold close near the high of the range at 1720.50/1721.50.

Ø Silver opened higher at 34.70/34.75 but slid to its intraday low of 34.46/34.51 after the data. Regaining strongly throughout the day, alongside gains in base metals and crude, silver reached its intraday high of 35.61/35.66 just before ending the session at 35.57/35.62.

Technical Commentary:

Ø Gold is closing higher today at 1721. The metal experienced its whole month of February range yesterday by trading to 1790 before crashing down to 1690 by the end of the day. We have not seen a $100 drop in Gold since the days of Lehman's collapse. The price action is very bearish considering the failure ahead of November’s high 1803. Our close here at 1721 takes some of the pressure off the metal but another move below 1690 will have the market refocusing back toward 1500.

Ø Silver is closing up today at 35.47. Silver held both sides of its bullish channel yesterday when it dealt to 37.46 and then 34.23. The base of this channel comes in today at 34.51. The 35.65 resistance was a previous major top so we expect resistance again. The Gold Silver ratio was not able to hold yesterday’s bounce and we find it back to 48.50. The ratio is in a bearish channel with boundaries 47.75 to 51.03. It is interesting to note that the 200 day ma of the ratio comes in at 48.49. This has proved pivotal in the past.

Technical levels for 2^nd Mar, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,679.37	1,775.57
Silver	34.103	37.163

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
2nd Mar	German Retail Sales m/m	EUR	Pending at 12:30pm	0.5%	0.1%	If Actual > Forecast = Good for currency. Change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations.
1st Mar	ISM Manufacturing PMI	USD	52.4	54.6	54.1	As Actual < Forecast =Not Good for currency. Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry has Decreased.

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.

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