-- Posted Thursday, 13 January 2005 | Digg This Article

 

GOLD	SILVER
GOLD FEBRUARY FUTURE -- 426.80	SILVER MARCH FUTURE -- 673.00
EXPECTED TRADING RANGE
GOLD -- 415.0 -- 433.0	SILVER -- 641.00 - 690.00
GENERAL MARKET CONDITIONS
The 2005 honeymoon for the US dollar seems to be over. Yesterday I wrote I will continue to remain a dollar bear and this is turned into reality. US November trade deficit rose to a new record of $60 billion as trade from EU and Japan increased. But this is also a signal that demand from the world’s biggest consumer country is helping other developed nations to grow. The choppiness will increase in 2005. One month we may US dollar rise and the other a collapse. Traders, if they are not prepared need to get themselves geared for it. I was watching US John Snow’s live interview in a particular television channel yesterday and my interpretation of his/US strong dollar policy is same that they did in 2004. It seemed Mr. Snow wanted markets to interpret the other way round. In the other news China risks inciting a backlash from U.S. lawmakers and businesses because of subsidies for state-run companies, curbs on imports and the fixed value of its currency, U.S. Commerce Secretary Donald Evans said. ``When China's leaders fail to produce results on the points of friction in our trading relationship, their failure only empowers those critics within the U.S. political system,'' Evans said in a speech to the American Chamber of Commerce in Beijing. The U.S. blames Chinese government policies for aggravating a trade deficit with China that grew to a record $150 billion in 2004. Trade authorities have imposed tariffs on Chinese imports including televisions, furniture and textiles since 2003 after complaints by U.S. manufacturers, which shed 2.7 million jobs since 2001. Evans reiterated a Bush administration call to end the currency peg and urged China to drop retail-sales restrictions, curb state-run bank lending and provide a more transparent rule of law. But nothing can be done to China. The European Commission raised its economic growth forecast for the dozen countries using the euro after oil prices retreated from records and the euro declined against the dollar. The economy will grow about 0.5 percent in the first quarter, faster than a Dec. 1 estimate of 0.4 percent, the Brussels-based commission said today in its monthly review of the growth outlook. This just tells another why I expect greater choppiness in all the financial markets. First the weakening of the US dollar bleeds the Eurozone economy. Next increasing demand of goods from EU acts as medicine from USA to recover. What an irony for policy makers of EU. Markets should follow a buy on dip strategy (with a higher stop loss) for the rest of 2005 unless there are certain technical resistances involved.
GOLD…..
Gold has broken the resistance of $425.40 and needs a close over the same on Friday for further gains to target $435 to $450 in the coming weeks. On the lower side dips under $420 will attract demand.
SILVER…..
Silver has broken the resistance $672.50 and needs a close over the same on Friday to target $700. On the lower side $650 and below will attract demand.
Happy Profitable Trading
Disclaimer : Any opinions as to the commentary, market information, and future direction of prices of
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Prepared By Chintan Karnani. Web Site:www.insigniaindia.com

-- Posted Thursday, 13 January 2005 | Digg This Article

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