SILVER

The May silver contract has started out slightly softer this morning perhaps because of a somewhat bearish article on silver that was released over the weekend in the US press. With the press on silver playing up the rise in silver exchange stocks and highlighting the silver market's potential for price volatility, it could take a definitive hope for more US easing directly ahead just to lift silver prices out of a pattern of lower highs on the charts. At the end of last week Comex Silver Stocks were put at 141.869 million ounces for a rather large single day gain of 1,221,283 ounces. Comex Silver Stocks are now at the highest levels since 08/06/2008. Against a back drop of fresh slowing fears and lingering Euro zone debt fears, the reaction to US scheduled data this morning will be very important. Toward the end of last week, silver was at times benefiting from weaker US data and that theory will be put to test early in the US Monday trade action. The Commitments of Traders Futures and Options report as of April 24th for Silver showed Non-Commercial traders were net long 18,546 contracts, a decrease of 2,763 contracts. The Commercial traders were net short 25,169 contracts, a decrease of 5,017 contracts. The Non-reportable traders were net long 6,623 contracts, a decrease of 2,253 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 25,169 contracts. This represents a decrease of 5,016 contracts in the net long position held by these traders. A slightly weaker bias to start but we see the May silver contract respecting support down at $31.10. In order to throw off a pattern of lower highs on the charts, the May silver contract will have to close back above $31.90 today to alter the down trend pattern. That down trend channel resistance line falls to $31.83 on Tuesday. However, to check up the bear's fundamental control, May silver will have to manage a bounce in the wake of soft scheduled US data this morning. In other words, the bull camp has to be saved by hopes of easing and without that benefit, May silver might fail and forge a quick return down to $30.88.

OUTSIDE MARKET DEVELOPMENTS:

 Equity markets in Asia were higher off the hope for US Fed easing, but there were also some market closures due to holiday in the region. European markets were able to initially discount lingering Euro zone debt fears, but those markets fell back into negative territory in the wake of a negative Spanish GDP reading, which in turn came on the back of a very high Spanish unemployment rate last week. US stock markets were showing some initial weakness this morning, as the fear toward Europe and concerns of a soft US Non farm payroll reading at the end of this week, have left many investors concerned.
With some additional Spanish Bank down grades overnight and news that Spain has fallen back into recession, the European debt situation has been thrown back onto the front burner again. The negative macro economic view from the Euro zone and a string of weak data points from the US recently has also caused some downward revisions for the upcoming US Non farm payroll reading. Some economists are suggesting that warm early spring weather might have pulled forward spring or seasonal hiring in the US and that could produce a weaker than expected US number at the end of this week. There would also seem to be some international discussions that austerity measures are too strenuous right now and seeing that line of thinking gain prominence could eventually lend some fresh support to gold prices. In the near term, the gold market looks to take its direction from US stocks and perhaps from the global macro economic outlook. Traders should be on the lookout for positive gold price action in the wake of weak US data flows, as that type of action would confirm that gold continues to hope for easing from the US Fed. Comex Gold Stocks were 11.000 million ounces up 7,000 ounces. Comex Gold stocks are now at their highest levels in the past 10 sessions. The Commitments of Traders Futures and Options report as of April 24th for Gold showed Non-Commercial traders were net long 139,449 contracts, a decrease of 7,384 contracts. The Commercial traders were net short 173,854 contracts, a decrease of 9,322 contracts. The Non-reportable traders were net long 34,405 contracts, a decrease of 1,939 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 173,854 contracts. This represents a decrease of 9,323 contracts in the net long position held by these traders. After climbing above a two month old down trend channel resistance line last Friday morning, June gold has remained above that level in the early Monday US trade. However, the failure to close above $1,660.60 in the June gold contract today could embolden the bear camp again. In a twist of fate, we suspect that gold will garner a minor lift in the wake of a decline in the Chicago PMI report, as a soft US report is likely to rekindle speculation that the Fed is poised to come off the bench. With the added fear toward Spain, the US Fed might be on alert, especially with the US payroll report looming on the horizon. Critical support is seen this morning at $1,660 in the June gold contract and a quasi upside breakout would be seen today with a minor rise above $1,665.80.

GOLD‏ (Spot) intraday:

BUY @ Market Price / 1660 , Stop at 1650 with 1674 & 1682 as next target.


The downside breakout of 1650 will open the way to 1640 & 1633.

SILVER‏ (Spot) intraday:

BUY @ 31.28 / 31.20 , Stop at 30.08 with 31.53 & 31.88 as next targets.

The downside breakout of 30.08 will call for 30.92 & 30.67

precious metals flash

Gold did another step forward after a successful Italian bond auction and a weak US GDP report for sent the USD lower. Global Gold ETF holdings saw an increase of 36’000 ounces or 1.1 tons from ETF Securities. Net Futures & Options positions on Comex as per last Tuesday look interesting. For Gold longs were reduced and shorts increased, which led to a drop in net length of 932’000 ounces to 17.4 Mio. ounces, not far from the January low of 16.8 Mio. ounces. Almost the same can be said of Silver, where net length fell another 25 Mio. ounces to 125.8 Mio. ounces. The lack of Silver interest is also evident by the sales number of 1 ounce American Silver Eagles, which fell to 1.32 Mio. coins in April, the lowest monthly reading since July 2008. Palladium net longs were the only ones with an increasing number to 778’000 ounces, mainly driven by short covering of 107’000 ounces and where we still feel that further shorts will be squeezed out. The most interesting read is on Platinum, where net length dropped to 901’000 ounces, with a large increase in short positions of 124’000 ounces. Large speculators have now a short position of 514’000 ounces, the second largest number ever and only beaten by 3000 ounces at the end of December 2011. Looking back, from a closing price of 1369 USD on 29th December, Platinum subsequently rallied to a high of 1737.25 in just 2 months, driving large specs to cover 372’000 ounces. These factors should provide support for Platinum on dips and leave it with a good potential to rally, should headlines of positive vehicle sales numbers or new supply disruptions out of South Africa hit the wires. In the news, Norilsk Nickel, the world’s largest Palladium producer said that production of Palladium fell 5% in the first quarter to 649’000 ounces, while Platinum production fell by 2% to 166’000 ounces. Given that it’s month end, we would expect precious metals to witness some push higher. Gold needs now to clear some major technical hurdles, with following moving averages on the June future ahead: 100 dma at 1676.50, 50 dma at 1681.60 and then the tough 200 day moving average at 1702. Additional resistance at 1682.25 can be expected from the 38.2 % Fibonacci retracement of the bearish move from 1794.30 to 1613.00. Looking at Comex option activity, buying interest for calls still outpaces puts by far, which suggests that bullishness is returning and provided 1702 can be cleared, a larger move higher can be expected for May.

JUN GOLD

Resist: 1669.70+, 1681.00

Supprt: 1649.90, 1642.50-1640.90*
Comment: Last week’s rallies have powered a short term bull upturn from corrections and projects rallies to challenge the 1681.00 swing high for an upside breakout to send rallies near 1689.70. Look for continued climbing trade action the next few days. Any dips should fight to hold along 1650+/- and only a close back under 1640.90* marks a turn back to bear trending action.

JUL SILVER

Resist: 31.58, 32.05*, 32.70+
Supprt: 30.75-30.69, 30.23-30.00
Comment: Overall the market remains in a bear downturn. A close under last week’s low will fuel pressing moves to 29.15. Corrections late last week give near term positive signals with a chance to extend retracement rallies and push into a reversing turnaround. A close over 32.05* flips short term forces up and should drive rallies to previous downturn levels at 32.70-33.30.

COMEX SILVER (MAY) 04/ 30 /2012:

The near-term upside target is at 3175.0. The next area of resistance is around 3153.0 and 3175.0, while 1st support hits today at 3107.0 and below there at 3075.0.

COMEX GOLD (APR) 04/ 30 /2012:

The next upside objective is 1678.4. The next area of resistance is around 1671.3 and 1678.4, while 1st support hits today at 1654.5 and below there at 1644.5.

PRECIOUS METALS RECAP 4/27/2012

June Gold closed up 2.4 at 1662.9. This was 11.8 up from the low and 5.5 off the high.

July Silver finished up 0.135 at 31.411, 0.059 off the high and 0.246 up from the low.

After seeing follow through selling pressure early in the week, the gold market managed to regain its footing toward the end of the week. Surprisingly the gold market managed to rally Thursday in the wake of slack data and higher equities and that prompted ideas that perhaps weaker US data was the shortest path to additional US easing. On the other hand, gold today had the benefit of noted weakness in the Greenback and evidence of a strengthening Chinese currency and that probably provided the market with a lift. Given the noted low to high range of roughly $45 an ounce, the bull camp in gold might feel like they are beginning to challenge the pattern of lower highs and lower lows that has been in place since the end of February.

While silver was also able to managed a low to high recovery bounce of roughly $1.48 an ounce this week, the bull camp in silver didn't seem to be as keen as the gold to benefit from the idea that slowing US data could bring the US Fed off the bench sooner rather than later. Nonetheless physical commodities like silver generally weathered a fairly negative macro economic environment this week. In fact, to finish the week higher after slow US data and rekindled Euro zone concerns is a really impressive feat for the silver bulls.

Market Commentary

Ø A weaker dollar overnight saw gold open higher at 1651.25/1652.25. Disappointing jobs data was offset by better than expected housing data and investors were once again optimistic. After an initial dip to its intraday low of 1648.50/1649.50, the metal moved higher with more willingness to put on risk. Gold eventually reached an intraday high of 1661/1662 mid day. The metal remained near its high end of the day’s range, alongside strong gains in equities, and closed the session at 1659.25/1660.25.

Ø Silver opened higher at 30.76/30.81. Recovering from a mid morning dip to 30.65/30.70, silver then gained momentum alongside strong gains in base metals and crude. Silver eventually reached an intraday high of 31.28/31.33 just before closing the day at 31.20/31.25.

Technical Commentary

Ø Gold closed higher today at 1659, moving towards the upper trendline in the bear channel it has been in since late February. We would need a clear break through this resistance level to bring in more buyers. Failure to clear the resistance level at 1663 will bring on a test of the long-term uptrend, currently at 1609.

Ø Silver closed higher at 31.20 but remains within the range of Monday’s steep sell-off. Resistance is at 31.71, Monday’s high. Support is at 30.00, around yesterday’s low. The Gold-Silver ratio is trading lower at 53.26, its first pause after 4 sessions higher.

Technical levels for 27th April, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1 ,646.51	1 ,667.44
Silver	30.671	31.523

Economic Calendar:

Date			Economic Indicator	Country	Actual		Forecast	Previous		Effect & Remarks
	27th April	Advance GDP q/q		US	Pending at 6:00pm	2.6%			3.0%	If Actual > Forecast = Good for currency. Annualized change in the inflation-adjusted value of all goods and services produced by the economy.
	26th April	Unemployment Claims		US	388K	374K			386K	As Actual > Forecast =Not Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week has Increased
	26th April	Pending Home Sales m/m		US	4.1%	1.2%			-0.5%	As Actual > Forecast = Good for currency. Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction 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.

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mcx silver

Above 54460 expect 55985,56325

Below 54460 expect 54105,53280

(INTRADAY: Moderate positive above 54460)

Action1: BUY @ ( 55290 / 54970) with stop (54460) for target = 55985,56325

CURRENT RATE :

MCX : 55430

SPOT : 30.78

INR : 52.57

DUTY : 3378

mcx gold

Above 28595 expect 28985,29100

Below 28595 expect 28465,28295
(INTRADAY: Moderate positive above (28595)

Action1: BUY @ ( 28815 / 28730 ) with stop (28595) for tgt=28985, 29100


CURRENT RATE :

MCX : 28904

SPOT : 1649.30

INR : 52.57

DUTY : 116151

SILVER‏ (Spot) intraday:

BUY @ 30.67 / 30.48 , Stop at 30.18 with 31.08 & 31.28 as next targets.

The downside breakout of 30.18 will call for 29.97 & 29.48

GOLD‏ (Spot) intraday:

BUY @ 1644 / 1639 , Stop at 1631 with 1654 & 1661 as next target.

The downside breakout of 1631 will open the way to 1623 & 1613.

Market Commentary

Ø Gold opened unchanged at 1642.25/1643.25 in anticipation of the FOMC meeting. Gaining slightly to an intraday high of 1644.50/1645.50, the metal relaxed until release of the FOMC comments and rate decision. With rates remaining unchanged and comments indicating a refrain from additional stimulus, gold quickly began to sell off eventually reaching an intraday low of 1624.25/1625.25 mid day. As quickly as it dropped, gold recovered on renewed buying, closing the session almost unchanged at 1641/1642.

Ø Silver opened a little higher at 30.86/30.91. Reaching its intraday high of 30.97/31.02 early morning, silver then began to slowly decline and then rapidly sold off to an intraday low of 29.94/29.99 after the comments. Like gold, a late session rally took the metal to its close at 30.39/30.44.

Technical Commentary

Ø Gold is showing unchanged today at 1642. The metal is stuck within our April range of 1613 to 1683. Only a move out side of these parameters will inspire a bigger directional play. The 3.5 year trend line support is seen at 1627 on the weekly chart. A close below this level on Friday will bring in liquidation selling of stale Long Gold positions.

Ø Silver probed to fresh multi month lows to 30.00 before recovering to current 30.63. We are bearish Silver following the break of huge support pivot 31.00. Our target for Silver is 28.86, the 76.4% retracement of the 26.20 to 37.46 up move. The Gold Silver ratio spiked higher to 54.20 before retracing to current 53.63. The ratio is bid with potential for 100% retracement to 57.50.

Technical levels for 26th April, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1 ,629.32	1 ,655.51
Silver	30.023	31.173

Economic Calendar:

Date			Economic Indicator	Country	Actual		Forecast		Previous	Effect & Remarks
	26th April	Unemployment Claims		US	Pending at 6:00pm	374K		386K		If Actual < Forecast = Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week.
	26th April	Pending Home Sales m/m		US	Pending at 7:30pm	1.2%		-0.5%		If Actual > Forecast = Good for currency. Change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.
	25th April	Core Durable Goods Orders m/m		US	-1.1%	0.6%		1.8%		As Actual > Forecast = Good for US Currency. Change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items.
	25th April	FOMC Statement, FOMC Economic Projections, FOMC Press Conference		US		Na		Na		Bernanke says Fed prepared to do more for economy but for more hawkish. Additional balance sheet excel could be taken if required.

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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