-- Posted Monday, 13 February 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $547.90	COMEX SILVER MARCH FUTURE -- $923.50
EXPECTED TRADING RANGE
GOLD -- $525.00 -- $575.00	SILVER -- $874.00 - $972.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $215.60 - $235.60	NYMEX CRUDE OIL FEBRUARY - $61.20 - $66.27
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7700 - Rs.8140	Rs.13000 - Rs.13630
COPPER MARCH FUTURE	CRUDE OIL FEBRUARY FUTURE
Rs.210.20 - Rs.233.40	Rs.2752 - Rs.2970
GENERAL MARKET CONDITIONS
Gold April future fell to a low of $546.50 while silver March future fell to a low of $921.50 in Asian trade. Gold and silver just had two bad trading days in the previous week and had the largest fall since week ending December 16, 2005 as hedge funds booked profits. Crude oil and copper fell marginally as the US dollar had the highest gain against the Euro and Sterling since the beginning of 2006. The US trade deficit for the month of December increased from $64.7 billion to $65.7 billion.  This brought the total deficit for 2005 to a new record high of $725.8 billion.  On the flip side, the US posted its largest budget surplus in four years.  Even though the government continues to spend more and more money, tax receipts also hit a new high, which brought in a surplus of $21 billion in January.  The G8 meeting concentrated on high oil prices as the top threat to the world economy and focused talks in Moscow on ensuring access to fuel supplies to Europe. High and volatile oil prices'' remain a risk to global growth, the ministers said in a statement released after their two-day meeting. ``Market mechanisms are vital to the effective functioning of the global energy system.'' The G-8 statement also said the global economic expansion ``remains solid and is expected to continue in 2006.'' More progress needs to be made in narrowing economic disparities such as a record U.S. trade deficit and weak growth in Asia and Europe, it said. Nothing official as far as the view on G8 oil prices are concerned. However the G8 nations particularly US wants itself to be compensated indirectly for its higher imports and non competitiveness in global manufacturing by using the phrase “narrowing economic disparities such as a record U.S. trade deficit…”. US may resort to protectionism in the coming years if the US trade deficit continues to rise which is another reason for gold and silver bulls to cheer. These bits and pieces of economic numbers are early warning signals that the world is slowly moving away from the US dollar standard to historically gold standard. Gold and silver may fall another 20% - 25% from the current levels and will still maintain the long term bullishness.  Geopolitical risks are the market movers for the time being. Any signals of use of military force by US and its allies on Iran will result in crude oil nearing $100.00 mark. Iran is saying that it may follow North Korea and breach the NPT. These uncertainties will keep upward pressure on commodity prices as well as treasury prices. The US dollar may be supported on interest rate differentials.  Markets will be looking forward to Fed chairman Ben Bernanke’s first ever semiannual testimony on the economy and monetary policy.  The market will be listening in very closely to hear where the new Fed Chairman stands on interest rates and we expect the question and answer session to be particularly interesting.    The coming week is very crucial for gold and silver. If gold closes below $550.00 on Friday and silver closes below $926.00 Friday, then expect a beginning of a correction in gold and silver prices, else gold and silver will bottom out this week. On needs to be patient and buy on major dips with a high stop loss in both gold and silver.
GOLD
Gold needs hold $546.50 to prevent a fall to $540.00, $538.00 and $525.00. Only a weekly close below $525.0 below result in further losses to $510.00 else the downside will remain limited to $525.00. On the higher side $568.00 is key resistance, a break of which will result in re- test of $578.50 and $600.00.
SILVER
Silver needs to hold key short term support at $926.00 to prevent a fall to $903.50 and $887.00 and $874.00. On the higher side $952- $960.00 is the initial resistance zone with $995.00 as the key resistance.
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-- Posted Monday, 13 February 2006 | Digg This Article

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