8/18/2011 05:39:00 PM
Your Advisor
Bullion Trend
Both bullion metals can buy at higher levels, its a good time for short term buying. We expect gold to trade higher today on account of dollar weakness and rise in risk aversion in the global financial markets due to global economic tensions. Silver is expected to trade with a sideways bias taking mixed cues from base metals and a weaker dollar.
Base Metals Updates
Even the crucial upside regions 404-405 has broken out in the earlier session, the moves have been disappointing and less indicative to this end. For the day we favour an initial dip followed by a consolidation then trigger reaction rallies. A direct sell off below 396 would be an early signal of strong selling pressure. Following zinc, copper gained 1.2 percent on the LME and around 1.3 percent on the MCX to be the second best performer on Wednesday. China’s buying of the metal has led drawdown in copper inventories which supported prices in yesterday’s trading session.
After posting gains in the previous session, prices are exhausted to keep the momentum and likely to show a reversal initially, but such moves are expect to held near 3880 for buyers to enter into positions to reap the benefits. Direct fall below the same may find support at 3820-800. If prices consistent above 4020 we would see a rally till 4060/4120/4160 levels. We expect crude oil prices to come under pressure today as rising worries over global economic recovery would lead to demand concerns. However, dollar weakness may cushion sharp downside.
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