Silver and copper continue to rally as March futures rose to a high of $964.50 and $220.80 while gold traded firm. Renewed talks on the launch of a silver exchange-traded fund (ETF) getting closer to approval resulted in a attracting fresh investment into the poor man’s gold. Barclays Global Investors said its silver-backed security, iShares Silver Trust, appeared to move a step closer to approval after the U.S. Securities and Exchange Commission issued a filing about its potential listing on the American Stock Exchange.
Fundamentally speaking there will be a severe shortage of silver in the coming years than silver considering its industrial usage. Silver is used in CD-ROM’s and other data storage devices, it is used in catalytic converters which help automobiles meet ever stringent emission norms, I hear of silver being used some new technology washing machines. There are endless uses of silver which help us in meeting some of our day to day needs. Higher incomes in Asia and other parts of the world will result in unstoppable demand for good which use silver. On the supply side there is no new discovery of silver mines and it will be upto the silver mining companies on the decision to increasesilver production. We have mentioned in our earlier reports that silver will rise more than gold in 2006 and we reaffirm that view. If you have not invested in silver it’s not too late now.
A huge victory for Hamas in Palestinian parliamentary elections has radically transformed the region's political landscape and generated unease in western capitals wary of the dramatic rise to power of the armed Islamic fundamentalist movement. Confirmation of its startling electoral triumph, Hamas will attempt to form a coalition government in the face of mounting international pressure for it to renounce violence and assume a purely political path or risk diplomatic isolation. Hamas, listed as a terrorist organisation by the EU and US, decimated Fatah's support base in West Bank urban areas, including Jerusalem, Hebron and Ramallah as well as its Gaza stronghold. Israel and the US have long refused any dialogue with the group which has gained popularity among Palestinians for its resistance against Israeli occupation as well as its extensive charity network and clean image. In its first official comment, Israel urged the EU, the biggest aid-donor to the Palestinian Authority, to take a firm stance against the establishment of a Palestinian "terrorist government". Israel's acting prime minister Ehud Olmert said he would not hold negotiations with a government that does not stick to its most basic obligation of fighting terror. US president George Bush said Hamas's victory was a sign Palestinians were unhappy with the status quo and showed democracy at work, which was positive for the Middle East. But he reiterated his view of Hamas as a terrorist group.
Palestine along will Iran will result in gold and silver trading with a northward direction. We have the Fed meeting next week as well as UN security council’s meeting on Iran. Considering the fragile geopolitical developments over the middle East traders will prefer to go long than short over the weekend.
GOLD
Gold is now consolidating at $555.00 and certainly looks headed for $600.00. Only a close below $550.00 for 2 consecutive days will result in further losses to $540.00 & $525.00 else the downside is limited. On the higher side a break of $568.00 will result in $600.00.
SILVER
Silver targets $1000.00 & 1050 if it holds $952.00 on closing basis. Only a fall below $936.00 for four hours will result in further losses to $916.00& 909.00 else the downside is limited for silver.
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