-- Posted Tuesday, 21 February 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $556.50	COMEX SILVER MARCH FUTURE -- $951.50
EXPECTED TRADING RANGE
GOLD -- $542.00 -- $568.00	SILVER -- $920.50 - $972.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $218.35 - $233.60	NYMEX CRUDE OIL MARCH  - $59.40 - $63.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MARCH FUTURE/KG
Rs.7940 - Rs.8200	Rs.13330 - Rs.13730
COPPER MARCH FUTURE	CRUDE OIL MARCH FUTURE
Rs.212.20 - Rs.233.60	Rs.2742 - Rs.2930
Gold and silver continued their rise this week after markets re opened after US holiday. Gold April future rose to a high o $559.50 while silver March future rose to a high of $957.00. The US dollar gained while crude oil prices trade over $61.00 a barrel.  Whenever gold, silver and any of the commodities sky rockets, most of the analysts write that it is due to higher investment demand by hedge funds or greater physical demand. Have you ever wondered why hedge fund’s or investment companies invest in precious metals as well as base metals and not in other commodities? Hedge funds do not invest in real estate, perishable commodities and ferrous metals. Hedge funds do not invest in steel as there are multiple varieties and if they stock themselves up steel will deteriorate and value will reduce. They invest in gold, silver, copper or any other commodity which has less of variety and maintains the same physical property over a period of time. Gold has only one variety and can be stored easily and will retain its shine for an unlimited period of time. Copper is one base metal where there is less variety in the products and again does not deteriorate over a period of time. Copper is the fastest rising commodity. According to our estimates the global physical copper value at any point of time even at the current historical prices is roughly between $22 billion to $25 billion. $25 billion is pea nuts in this global financial market. Large number of small hedge funds are investing in physical copper and hedging their risk in the commodity exchanges which is driving the prices. There is no shortage of copper at the moment and that the prices are created artificially. Higher prices have resulted in industrial users maintaining a higher inventory and looking for substitutes for copper such as aluminum.  The same is with gold and silver but to a much lesser extent. A slow and consolidated price rise is justified for every commodity. But a $8 - $10 rise every week for gold makes be believe that the rise in gold prices will sooner than later start to overheat and the fall will beat the best of the forecasts. The same will be silver and but silver will recover much quickly than gold. Long term bullishness remains intact for precious metals.  There is lack of major market moving news today and it will be a technical trade day for gold and silver. The overall sentiment is bullish for gold and silver and intra day market moves on sentiments.
GOLD
Gold targets $563.50 and $568.00 if it is able to maintain its momentum. A convincing break of $568.00 will result in $578 - $585.00 zone. On the lower side $551.80 and $542.00 are the support levels with $534.50 as the key short term support.
SILVER
Silver targets $962.00 - $972.00 if it holds $952.00. A convincing break $972.00 will result in re test of $995.00. On the lower side as long as $926.00 holds on closing basis the downside is limited.
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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 Tuesday, 21 February 2006 | Digg This Article

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