Sharekhan Commodities Buzz dated December 12, 2006

Bullions: Consolidation likely
Gold rose on Monday after hitting a three-week low with bargain hunters and physical buyers supporting a market that remained vulnerable on thin trading ahead of Christmas. As a currency hedge, the market is waiting to see further weakness in the dollar. But the greenback has been steady against the other major currencies. Today's FOMC minutes might dictate the future direction for gold and any hint of no rate cuts would send the dollar higher and the precious metals complex lower. On the data front, October's trade balance is likely to be $63 billion against $64.3 billion, which should support the dollar.

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