Gold following the lead of oil and U.S. dollar

The MS findings are somewhat in opposition to the projections made by the Bombay Bullion Association that India might import 800 tonnes of gold in 2011. The country imported 722 tonnes of gold in 2007, only 450 tonnes of the yellow metal in 2008, and about 559 tonnes in 2009. Based on the most recently available statistical data, if 2010’s figures come in at just above 800 tonnes, then the Morgan Stanley estimates would put 2011’s Indian gold import tally at nearer to 700 tonnes.

Overall, and with the exception of 2008, (which was at the lower end of the scale of ‘normal’ import levels), the 2011 MS projection remains broadly within the country’s traditional annual gold import range. However, much will still depend on what happens to gold between now and the end of the year, pricewise. The good news in the MS survey is the fact that the surveyed indicated a reluctance to sell their existing gold stash, unless dire conditions were to dictate otherwise.

At opening time, silver traded at the $35.90 mark on the bid side, losing 20 cents in the wake of mild selling. Monday night analysis by Elliott Wave opines that silver’s gains have lagged those in gold during the past couple of sessions and that the white metal remains under a key, $36.56 per ounce level. That said, there is potential for silver to still advance to the mid $38.00 price zone if the trading climate cooperates. However, a fall to under $33.55 is seen as “revitalizing” the short-to-medium term bearish wave pattern. To be continued.

Platinum and palladium fell by roughly equal amounts, with the former shedding $14 to ease to the $1,732.00 level and the latter dropping $13 to touch the $733.00 mark. Several Japanese automakers (Honda and Toyota among them) have delayed the restart of car production until at least March 27 as parts and steady electrical power are still in spotty supply. Sony actually shut five more of its domestic plants down as it has difficulties securing parts from its suppliers. For the time being, the noble metals group will continue to take its trading (and price) cues from the situation in Japan’s factories’ operational status.

Efforts to contain the radiation threat in Japan and the campaign to contain Col. Gaddafi and his dwindling forces continued on an on-and-off basis during the night, and they met with varying degrees of success. The damaged nuclear reactors at the Fukushima complex and the threat they pose to not only their proximal surroundings but to the rest of the world remained on the top of the to-do list of the Japanese authorities for yet another day. That said, regional and local markets staged overnight advances as some of the fears that the situation could deteriorate eased among investors. The Nikkei Stock Average index surged by 4.4% to finish the session above the 9600 level last night.

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