-- Posted Thursday, 16 February 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $540.20	COMEX SILVER MARCH FUTURE -- $918.00
EXPECTED TRADING RANGE
GOLD -- $525.00 -- $560.00	SILVER -- $980.00 - $955.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $210.35 - $225.60	NYMEX CRUDE OIL FEBRUARY - $55.40 - $62.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7680 - Rs.7970	Rs.12980 - Rs.13530
COPPER MARCH FUTURE	CRUDE OIL MARCH FUTURE
Rs.208.20 - Rs.225.60	Rs.2540 - Rs.2720
April gold future fell to a low of $539.00 before settling at $542.70. March future fell to a low of $907.00 and jumped to $923.00 just a minute before close and settled at $921.50. Copper futures fell as China imported less copper in January 2006 and copper inventory at the highest level over the past sixteen month in the London Metal Exchange. Crude oil futures fell below $60.00 a barrel on rise in US gasoline inventories and warmer weather in US.  Fed Chairman Ben Bernanke said that interest rates might have to rise to prevent the US economy overheating but inflation remains moderate. Mr Bernanke said the Fed was not worried about the flat yield curve, saying it reflected confidence in the Fed’s ability to maintain economic stability, and overseas demand for US bonds, rather than signalling an impending economic slowdown. In terms of the housing market, Bernanke acknowledged that it poses a risk to growth, but like many, he felt that a cool down is more likely than a collapse.  Overall, there were no surprises and the market got what it was looking for, which is a clearer outlook on interest rates.   Mr.Bernanke also said that Fed will be more transparent under him. You stop publishing M3 money supply numbers from April and then you say, hey I am now more transparent.   The $60 billion magic number that we were looking for in the net foreign purchases or TIC report was actually breached, causing a state of alarm as foreigners limited their purchases of dollar denominated securities to $56.6 billion, which was far less than the market’s $76.2 billion forecast and short of the $65.7 billion trade deficit for the month of December. Yesterday Mr.Bernanke said that he will try to increase US exports and take other measures to ensure the deficit is within manageable limits. Crude oil prices and investment attitude of Japanese investors will pose a risk to the trade deficit number and the treasury flows number.   Over the past one month I have been mentioning that current rise in commodity prices is due to surplus global liquidity. The Fed is expected to raise interest rates in March as well as May. The European Central Bank (ECB) may also raise interest rates in March. Bank of Japan could start raising interest rates as early as end April.  If there is a shrinkage in global liquidity the investment demand will also reduce which will result in weaker gold and silver prices. Physical demand is expected to remain strong.  Gold and silver may fall further after the inability to breach higher. However we have a long weekend. Monday US markets are closed while Friday there is an early close. If there an disturbing geopolitical news on Iran and middle east then we should se a higher close Friday with traders preferring to play safe and go long than short. A close below $550.00 for gold and a close below $926.00 for silver tomorrow will result in further losses next week to $520.00 and $878.00 next week.
GOLD
Gold needs to break $550.00 to prevent a fall to $532.00 and $519.50. Although looking weak but I am not writing it off as it jumped $3 seconds before close. Only a consolidated beak $550.00 will result in further gains to $560.00 and above.
SILVER
Silver is finding sellers between $935.00 - $950.00. It rose to a high of $940.50 just after open yesterday and subsequently fell sharply. Silver needs to hold $903.50 to prevent further losses to $887.00 and $870.00.
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-- Posted Thursday, 16 February 2006 | Digg This Article

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