-- Posted Tuesday, 31 August 2004 | Digg This Article

 

GOLD				SILVER
GOLD DECEMBER FUTURE -- 410.40				SILVER DECEMBER FUTURE -- 679.0
	Lower	Expected	Higher		Lower	Expected	Higher
BUY	402.50	407.40	413.10	BUY	650.00	663.00	687.00
SELL	406.80	412.60	416.70	SELL	662.00	686.00	703.50
EXPECTED TRADING RANGE
GOLD -- 405.80 -- 414.20				SILVER -- 663 -- 690.0
GENERAL MARKET CONDITIONS
Gold and Silver regained their lost confidence after Fridays drubbing. Lack of liquidity due to UK close forced the short sellers to cover their positions and this resulted in multiplier effect. Although many market participants expect a quiet week, with a good number of traders away enjoying the last week of summer or participating in the numerous events surrounding the Republic National Convention, we believe that the lack of market participants in the context of a very heavy economic calendar could cause unexpected volatility. Weak US personal incomes and inflation sent the yield on 10-year treasuries to 4.19%, the lowest level since April 2. Personal income rose 0.1% last month, posting its weakest growth rate since August 2002, while disposable income (after taxes) also rose by 0.1%, a 10-month low. Despite weak income growth, consumer spending rose 0.8%, after the June figure was revised to a 0.2% drop from an initial 0.7% decline. The bounce in spending emerges on the back of an upward revision in the Q2 consumer spending to 1.6% from the initial 1.0% reading. Nonetheless, that latest figure was the lowest quarterly increase since Q2 2001. On the inflation side, the core PCE price grew 1.5% in the year ending in July, matching the same figure as in the prior 4 months. The 1.5% figure falls safely below the Fed’s maximum level of tolerance of 2.0%. Yet regardless whether we are looking at core CPI or core PCE, inflation worries do seem to have eased, despite surging oil prices in June and July. The retreat in US gasoline prices has helped dampen prices in the pipeline. This should raise the key question of whether the Fed will raise interest rates next month. The upside is not yet over for both gold and silver. It is better to resort to hedging in the options markets whenever one buys or sells in the last week of summer. .
GOLD…..
Will gold break 420 this week? Euro needs to hold 1.20 and if it closes on Friday above 1.20 then 1.2385 will be the next target and gold will remain above 410. On the lower side any drop below 403.50 is a good opportunity to go long.
SILVER…..
Silver seems to have regained its volatility that it is know for. It should now target the region of 691-700 if there is daily close above 680. On the lower side 666 and below will continue to attract buyers.
Happy Profitable Trading
Disclaimer : Any opinions as to the commentary, market information, and future direction of prices of
specific currencies and precious metals reflect the views of the individual analyst, In no event shall
Insignia Consultants or its employees  have any liability for any losses incurred in connection with any
decision made, action or inaction taken by any party in reliance upon the information provided in this
material; or in any delays, inaccuracies, errors in, or omissions of Information.
Prepared By Chintan Karnani. Web Site:www.insigniaindia.com

-- Posted Tuesday, 31 August 2004 | Digg This Article

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