-- Posted Wednesday, 15 February 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $549.70	COMEX SILVER MARCH FUTURE -- $931.00
EXPECTED TRADING RANGE
GOLD -- $525.00 -- $560.00	SILVER -- $900.00 - $960.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $215.60 - $235.60	NYMEX CRUDE OIL FEBRUARY - $58.40 - $64.15
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7740 - Rs.8150	Rs.13060 - Rs.13760
COPPER MARCH FUTURE	CRUDE OIL FEBRUARY FUTURE
Rs.210.20 - Rs.228.60	Rs.2600 - Rs.2800
GENERAL MARKET CONDITIONS
Stronger physical demand for gold and silver from all parts of the world resulted in these metals paring some of its losses. Gold April future rose to a high of $551.00 while silver March future rose to a high of $936.00 in Asian trade. The US dollar had to make nay impact against the major currencies despite better retail sale numbers. Dow Jones industrial average once again crossed 11,000 in 2006 and there will be doubts whether 11,000 for some time or it’s just a one off day for 11,000. Crude oil fell below $60.00 a barrel ahead of the US weekly inventory numbers.  There will be higher physical demand globally in all the metals initially as those who had postponed their demand on expectations of a drop in prices start stocking. There are two factors for the rise in commodity prices. One is the physical activity and second is the investment demand. In the long run it’s the higher physical demand which pushes up prices and as once prices start rising speculators and investors start manipulating the prices which is what we have seen in 2005 and 2006 in gold, silver and copper. Investment demand may constitute between 30% to 40% of the price rise of gold and silver. Rest of the demand is physical. The higher daily volatility in gold and silver is due to short term speculators. There was position squaring by the speculators which resulted in gold and silver prices to correct and short sellers at lower levels got and opportunity to cover their positions. The net effect is the lower level of gold is now higher at $515.00 - $525.00 earlier this lower level was at $490.00. For silver the lower level now stands at $903.50 while earlier it was at $887.00. This process will continue with subsequent lower base edging further higher in the long term with $900 and above as the price target for gold and $1600.00 as the price target for silver. These targets will not happen over night but will happen in the coming years. Markets will be looking forward to the new Fed Chairman Ben Bernanke’s first semi annual testimony and treasury flow number for direction.
GOLD
As long as gold holds $534.50 on closing basis the downside will be limited for gold. On the higher side there is a strong resistance between $562.50 and $568.50 and a break of which will lead to $600.00 eventually. However a consolidated fall below $534.50 will result in $525.00 and $508.50.
SILVER
Silver has held $903.50 key short term support and needs to break and close over $952.00 for $995.00. There is an initial support at $926.00. Only a daily close below $903.50 will result in further losses to $887.00 and $874.00 which will provide yet another buying opportunity to long if at all these levels come.
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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
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-- Posted Wednesday, 15 February 2006 | Digg This Article

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