-- Posted Thursday, 16 September 2004 | Digg This Article

 

GOLD				SILVER
GOLD DECEMBER FUTURE -- 406.40				SILVER DECEMBER FUTURE -- 628.50
	Lower	Expected	Higher		Lower	Expected	Higher
BUY	398.80	403.20	408.40	BUY	607.50	617.50	634.50
SELL	402.80	407.80	410.70	SELL	615.50	632.50	642.50
EXPECTED TRADING RANGE
GOLD -- 403.20 -- 410.50				SILVER -- 615.0 -- 640.0
GENERAL MARKET CONDITIONS
Gold continued to rise yesterday during asian trade but unable to hold on to the gains in London and comex trade. The better than expected New York manufacturing data helped to strengthen the US dollar and the yellow metals moved inversely. Comes open interest rose to a new record.     Silver was like a Russian viper (a specie of snake) which remained in hibernation for most part of the day but ate all the stop losses whenever it felt hungry. Funds and institutional investors are net buyers of silver at the moment. Comex open interest rose marginally yesterday.     Markets are still directionless at the momentum and are looking for further news from anywhere for direction. This is one of the worst days for day traders. One should trade with a medium term perspective in mind.      Today’s release from the Treasury on capital flow data will be essential in determining the fate of the sudden jump in the dollar's momentum. In light of Tuesday's release of the record breaking current account deficit for Q2, dollar bulls would want to see another increase in foreign capital flows after the June data (released last month) showed a 10% increase in net inflows to $71.8 billion in US assets. The increase in June broke a 4-month losing streak in US-bound foreign flows. With the July trade deficit easing 9% to $50.15 billion in July, dollar bulls would be content with at least $70 billion in total net capital flows. Although such a figure would be at least $20 billion above the monthly trade gap, it would still present a decline from the prior month, which is a negative for the dollar. Also the consumer price index (CPI) will be relevant.
GOLD…..
Gold still needs to break 407.30 and 409.80 for further gains. Momentum indicators suggest a scope for further rise. The gold/dollar relationship was non existent for the past few trading suggestions has resurfaced once again. A rising dollar will not help gold. However since the downside risk for the euro remains limited to 1.2025-50, gold’s downside risk should remain limited to 402.
SILVER…..
Silver is closing higher with passing of each trading session. It is healthy development for silver bulls. Momentum indicators have now shifted to from oversold territory to neutral territory suggesting a scope for further rise. Silver faces resistance around the 200 day MA of 640.50. On the lower side any dip below 620 is attracting demand.
A BIT ON N.Y. FED INDEX
Although the NY Fed's index is not known for its market impact as in the case of the Chicago PMI or the Philly Fed Index, its timeliness is its most valuable attribute, since it precedes the release of other manufacturing surveys for the same month. This allows the Empire Index to serve as a predictive indicator for the manufacturing reports from the ISM, Chicago PMI and Philly Fed Index.       Yesterday’s figure posted the largest percentage increase since February 2002 when the index shot up 124%. More importantly, in that same month, the all-important manufacturing ISM rose to 54.7 from January's 49.9, crossing into expansion territory for the first time since July 2000. Similarly, the Chicago PMI also crossed above the 50 level for the first time since July 2000.      Thus, markets can predict a strong rebound in the September reports of the Philly Fed Index (due tomorrow) and the manufacturing ISM and Chicago PMI due later in the month. Though tomorrow's Philly Fed index is expected to drop 3 points from August's 28.5, a rebound may not be ruled out.
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 Thursday, 16 September 2004 | Digg This Article

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