-- Posted Wednesday, 8 February 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $551.00	COMEX SILVER MARCH FUTURE -- $929.00
EXPECTED TRADING RANGE
GOLD -- $540.40 -- $580.00	SILVER -- $912.50 - $995.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $226.60 - $234.60	NYMEX CRUDE OIL FEBRUARY - $59.80 - $66.27
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7900 - Rs.8200	Rs.13200 - Rs.13700
COPPER MARCH FUTURE	CRUDE OIL FEBRUARY FUTURE
Rs.224.20 - Rs.250.40	Rs.2752 - Rs.2970
GENERAL MARKET CONDITIONS
Gold and silver fell on profit taking ahead of the auction of US 30 year treasuries and Bank of Japan meeting on Thursday. April gold fell to a low of $550.10 while March silver fell to a low of $929.50 in Asian trade today. April gold settled at 554.80 while silver March settled at $941.00 respectively.  The current rally in commodities is all about liquidity and global interest rates. The auction of US treasuries and expectations that bank of Japan may stop its monetary easing policy soon has resulted in profit taking in gold and silver. Investors have a habit of pricing certain things before they occur and investors at the moment think that Bank of Japan officials may give a signal of a change in its interest rate outlook in its end April meeting. As the Japanese economy grows, its domestic credit and investment demand will result in less investment outside Japan as compared to the present scenario. Further the demand for Japanese bonds will also rise in late 2006 for early 2007. Interest rates increase or decrease of every country affects the global liquidity and it’s the higher global liquidity that in driving gold, silver and commodity prices.  Between 1982 – 2001 commodity prices were at an all time low. From 2001 as China became a force to reckon with, commodity prices (precious metals, base metals as well as crude oil) started rising and in 2006 they create multi year high with passing of each month. There was zero investment for sources of commodity supplies between 1982 and 2001 due to low prices. Mining companies were hesitant to look for new sources of say gold, silver, copper, crude oil etc between 1982 – 2001. Now with rising prices mining companies have started searching for new mines or crude oil sources. But finding a new copper mine or a crude oil source and starting production cannot happen over night. It may take between 5 years to 15 years for the same. Till then commodity prices including gold and silver will continue their bull run. However gold and silver prices may correct between 25% to 35% and subsequently rise between 160% to 200% in the same year as a part of the long term bull market.  Indian were buying gold frantically yesterday on the fall as it global gold stocks will come to an end. Gold imported stashed up gold at the highest levels in the past three weeks. As far as MCX is concerned, Mumbai was a big seller in April Gold future at Rs.8200 – Rs.8205. In New Delhi there was good buying in April gold future around Rs.8050. Silver prices continued to remain subdued on lack of buyers even at lower levels.
GOLD
A close below $550.00 on Friday will result in further losses for gold, else it will rise to $582.00. Gold has managed to hold $550.00 in January and needs to do to the same to prevent a test of $528.00. There is an initial support at $540.00
SILVER
Silver needs to hold $926.00 on closing basis to prevent a fall to $903.00. On the higher side $952.00 and $995.0 are the resistance zones.
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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
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-- Posted Wednesday, 8 February 2006 | Digg This Article

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