>DOLLAR WEAKNESS

DOLLAR WEAKNESS, CONTINUATION OF THE RALLY IN EQUITIES

■ Bailouts, the key reason for increased supply of the dollar

■The September Effect

■ Key gold-demand driver’s during September:

• The post-monsoon wedding season in India and increased buying before one of the most important festivals of the country - Diwali.

• Restocking by jewelry makers in advance of the Christmas shopping season in the United States;

• The holy month of Ramadan in the Muslim world, whose end in late September is marked by a period of celebration and gift-giving;
  

• And in China, the week-long National Day celebration starting October 1 and the run-up to the

■ Chinese New Year in early 2010.

■ Significance of the recent rally in the precious metals

■ Bottom-line: The dollar might correct 3-4% from the current levels suggesting a target of 74.2 for DXY. S&P is likely to move towards 1076 level making it a potent of 5% upside. On Gold the target is $1032 per ounce, another 4% from the current levels. Although the momentum is strong in Nifty, still it might be tough for it to cross the psychological level of 5000 during this move as the target for the index remains at 4970 another 6.6% form current levels. Target for Oil is $75/barrel and for Tadawul is 5842.

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