By Renisha Chainani
Gold and Silver fell most of the week due to strong Dollar and weaking Crude Oil prices. Treasury Secretary Paulson said, “A strong dollar is really very important” while Fed President Plosser called for the Federal Reserve to raise interest rates “sooner rather than later.” Plosser said that the Fed shouldn’t wait for an economic turnaround to raise interest rates.

Euro- Dollar is off the tops due to the credit and financial market fears centered on the potential collapse of Freddie Mac and Fannie Mae eased, as both lenders’ conditions seem to have stabilized. The German business confidence index has plummeted below the 100 mark as reported by the IFO index to the weakest level in 3 years. The same sort of deterioration was seen in the French business confidence index. Service and manufacturing PMI indices for the region as a whole remain in concretionary levels.

Even the Euro zone current account surplus turned into a deficit in the month of May, reflecting the difficult conditions across the region. With oil prices holding at $125 a barrel, the ECB may be forced to reduce their degree of hawkishness, which would weigh further on the Euro

Geopolitical tensions over Iran’s nuclear issue are keeping the gold market cautious. Iran's atomic energy chief says he hopes international negotiations on Iran's nuclear program could start based on proposals made by Iran and six major world powers. Aghazadeh made his comments after meeting with the IAEA chief in Vienna. The IAEA says Iran is withholding details on its sensitive nuclear activities

Next Week Important Economic Data of US, which can induce volitility in Bullion prices is:

Date	Event	Time *	Consensus	Previous
29/07/08	Consumer Confidence (JUL)	19:30	50	50.4
31/07/08	GDP QoQ (Annualised) (2Q A)	18:00	2.30%	1.00%
	Personal Consumption (2Q A)	18:00	1.50%	1.10%
01/08/08	Change in Non Farm Payrolls (JUL)	18:00	-75K	-62K
	Unemployment Rate (JUL)	18:00	5.60%	5.50%
	Change in Manufacturing Payrolls (JUL)	18:00	-40K	-33K
	Average Hourly Earnings (YoY) (JUL)	18:00	3.40%	3.40%
	ISM Manufacturing (JUL)	19:30	49.2	50.2
	Construction Spending (MoM) (JUN)	19:30	-0.30%	-0.40%

Gold has important support at $925 and resitance at $955

Buy MCX Gold (Aug) above 12800 SL 12600 Target 13100.

Silver has important support at $17 and resistance at $17.75

Buy MCX Silver (Sep) above 24800 SL 24250 Target 25200.

Crude Oil
During the week, the Organization of Petroleum Exporting Countries increased output by 200,000 barrels a day in July, according to preliminary estimates from PetroLogistics. Dolly, the first hurricane to hit the Gulf Coast this year, weakened to a tropical depression on Thursday. It made landfall along the U.S.-Mexico border July 23 as a Category 2 hurricane

Record prices are cutting fuel use in Asia, Japanese oil imports fell for the first time in nine months. South Korea consumed less fuel for the eighth straight month in June, state-run Korea National Oil Corp. said on July 22. The U.S., Japan and South Korea are the world's first, second and fifth biggest oil importers.

Crude oil may fall next week as Saudi Arabia increases oil output to lower prices and U.S. fuel supplies climb as slowing economic growth curbs consumption. Saudi Arabia said it would produce an extra 300,000 barrels of oil a day in June and another 200,000 barrels a day in July to curb record prices. The desert kingdom increased output by 280,000 barrels a day in June to 9.53 million barrels, the highest since March 2006.

Renisha Chainani is a Research Analyst with Anagram Securities Ltd, Ahmedabad.

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