Bullion

Gold surged to a record $1,009 an ounce in New York as the Bear Stearns Cos. bailout and a plunging dollar increased demand for the precious metal. Silver also gained.

· Gold futures for April delivery rose $5.70, or 0.6 percent, to $999.50 an ounce on the Comex division of the New York Mercantile Exchange. The price reached the highest ever for a most-active contract at 10:45 a.m., topping yesterday's record of $1,001.50. The metal has tripled in the past five years.

· Shares of Bear Stearns, the second-largest underwriter of U.S. mortgage bonds, plunged as much as 53 percent in New York Stock Exchange composite trading. The Fed earlier this week said it would lend banks $200 billion in exchange for mortgage-backed debt.

· The StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, began trading in November 2004 and reached a record 655 metric tons on March 10.

· Compared with government holdings, the ETF would rank eighth behind Japan, according to data from the producer-funded World Gold Council. The U.S. is the biggest holder with 8,133 metric tons, or 78 percent of its currency reserves, in gold.

· Still, high prices may discourage purchases by jewelers, the biggest buyers. Jewelry demand dropped 17 percent in the fourth quarter following a 15 percent gain in prices in the previous three months, data from the World Gold Council show. About 68 percent of gold demand last year came from jewelers.

· Imports by India, the world's biggest gold buyer, plunged 81 percent to 10.2 metric tons in February from a year earlier, according to the Bombay Bullion Association Ltd.


MCX Gold Apr

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Gold April: Buy at 12960 Target 13100 and 13160 Stop loss at 12915




MCX Silver May

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Silver May: Buy at 26640 Target 26950 and 27200 Stop loss 26410

US Economy Update

· The stock market got hit with news on Friday morning that Wall Street's biggest buyer of mortgage securities, Bear Stearns, needed emergency funding today to keep from going under. The June S&P 500 closed down 21.40 at 1,293.90.

· The Federal Reserve helped to provide today's funding for Bear Stearns and issued a statement saying that it "will continue to provide liquidity as necessary to promote the orderly functioning of the financial system." The June U.S. T-bonds closed up 1.22/64ths at 119.34/64ths, the highest close in seven weeks.

· The U.S. Labor Department said that consumer prices were unchanged in February and up 4.0% from a year ago, not as much as expected. Excluding food and energy costs, prices were unchanged in February and up 2.3% from a year ago. The December eurodollars closed up .21 at a new contract high of 97.995.

· The University of Michigan's consumer sentiment index slipped from 70.8 to 70.5 in early-March, but was better than expected.

Currency Update

· Consumer prices in the Euro area 15 were up 3.3% in February from a year ago, up from a 3.2% gain in January and slightly more than expected. The June euro finished up .0074 at a new contract high of $1.5590 in spite of concerns that central banks may try to intervene to support the U.S. dollar.

· Statistics Canada reported that productivity was down .8% in the fourth quarter, the biggest decline in twelve years, blamed on the loss of manufacturing jobs. The June Canadian dollar ended down .0002 at $1.0121.

· The Bank of France reduced its estimate of real GDP growth from .5% to .4% for the first quarter of 2008.