-- Posted Friday, 23 December 2005 | Digg This Article

 

GOLD	SILVER
COMEX GOLD FEBRUARY FUTURE -- $506.20	COMEX SILVER MARCH FUTURE -- $861.50
EXPECTED TRADING RANGE
GOLD -- $499.80 -- $525.20	SILVER -- $842.50 - $896.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $196.70 - $207.20	NYMEX CRUDE OIL FEBRUARY - $56.60 - $59.60
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD FEBRUARY FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7362 - Rs.7712	Rs.12652 - Rs.13150
GENERAL MARKET CONDITIONS
Gold recovered after the 10% fall from the December high over $540.00 as February future rose above $500.00 to a high of $507.30 before settling higher at $505.00. Silver March future has outperformed gold as it rose to a high of $860.00 before settling at $875.80.   History suggests that gold has fallen atleast ten percent after any major rise and thereafter recovered and re started its bullish run once again. The good thing about the current rally is that everybody was buying under $500.00 and were not worried. There was some good physical demand seen. Our forecast for $512.00 for gold in May 2005 was way out the mark. We are upping our 2006 gold target to $640.00 - $675.00.   There is nothing special about the current rally in silver. Infact we missed our target of $1050.00 for silver in 2005 and were disappointed as this is one metal which will scare everybody in its price rise considering the fact that silver is an industrial metal as well as a precious metal. Demand will far outstrip supplies. We have set $1250.00 - $1300.00 range for silver in 2006 and I will be a happy person if silver beats our upper end of the forecast.  The rise in commodities is partially due to increase in global liquidity. European central bank (ECB) along with bank of Japan were the liquidity providers in 2005. There are hints that bank of Japan end its zero interest rate policy after June 2006 while the ECB may raise interest rates by more than half a percent in 2006. The Fed may even be forced to cut interest rates in 2006 if the US economy does not perform as per their expectation. This is what Mr. Bernanke has to decide. As and when global liquidity falls or shrinks the pace of rise in commodities including gold and silver will fall in 2006. The pace of gold and silver’s rise will fall but they will continue to rise and that any major slide should be used as an opportunity to go long in 2006.   That’s all for the future of gold and silver. I wish everybody a “Merry Christmas” we will back again on Tuesday.
GOLD
Gold now needs to break $513.30 for $518.80 and test the key resistance at $528.30. On the lower side $502.20 is the key support and a consolidated fall below the same will result in further losses to $495.60.
SILVER
Silver needs break $878.00 for $900.00 & $930.0. On the lower side as long as $853.50 holds the downside is limited. A consolidated below $853.50 will result in $830.00 which should be the bottom.
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Happy Profitable Trading & Merry Christmas
Disclaimer : Any opinions as to the commentary, market information, and future direction of
prices of specific currencies, precious metals, base metals, or equity indices 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.

-- Posted Friday, 23 December 2005 | Digg This Article

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