-- Posted Friday, 3 March 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $570.70	COMEX SILVER MAY FUTURE -- $1018.50
EXPECTED TRADING RANGE
GOLD -- $559.00 -- $584.00	SILVER -- $968.50 - $1040.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MAY -- $220.70 - $233.60	NYMEX CRUDE OIL MARCH  - $61.80 - $66.60
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MAY FUTURE/KG
Rs.8100 - Rs.8280	Rs.13830 - Rs.14500
COPPER MAY FUTURE	CRUDE OIL MARCH FUTURE
Rs.220.30 - Rs.230.60	Rs.2730 - Rs.2880
GENERAL MARKET CONDITIONS
Silver, the ex poor man’s gold finally glittered when it edged past $1000.00 to an high of $1026.50. Gold was for one day was sitting on the back seat. Silver rose on speculation that Barclays Global Investors N.A. may soon get U.S. approval for an exchange-traded fund linked to the price of silver, making it easier for investors to own the metal. The demand in silver is high in anticipation of the ETF. Crude future are also nearing $64.00 a barrel while the Euro gained against the all the currencies after European Central Bank president signalled clearly that further interest rate increases are likely to follow a quarter percentage point rise to 2.5 per cent announced yesterday and warned of inflationary dangers ahead.  Silver is an industrial cum precious metal. The use of silver includes storage devices such, as CD’s, DVD’s, catalytic converters etc. There are no new mines being found as exploration activities have begun in the past two to three years and it takes an average of atleast five to discover a mine and another four to five years to start production. Fundamentally speaking the demand for silver always exceeds supply. However it’s the investment demand in any commodity which pushes up prices and not physical demand. We have mentioning that silver is one of the most undervalued commodity in whole of commodity pack. Despite the rise over $1000.00 we believe it is still undervalued. Silver should have been $1150.0 - $1200.0 by now. Silver has under performed in 2005 but should make up its losses of 2005 in 2006 and rise to $1550 - $1650.00 towards the close of the year. Average daily volatility index in silver will rise and we expect average volatility to be $30 in 2006.  Gold is an secular bull run. The rise in geopolitical threats and gradual depreciation of the US dollar against gold is one step forward from switching over from the US dollar standard to gold standard over the coming years. There will corrections but the support base gets higher. Gold fell to $536.00 last month and there after recovered. In December 2005 gold reached a high of $540.00 and fell to $490.00. The high of 2005 is now the support base for gold in the first quarter of 2006. If there is monthly close below $540.0 then only one can expect gold to have a sustained correction, else the fall below $540.00 will attract buyers in the coming weeks.  Euro-funded carry trades and Iran’s decision on Monday will result in traders going long than short over the weekend.
GOLD
Gold targets 580.00 - $600.00. On the lower side $565.00 and $560.00 is the support base. $550.00 is the short term support.
SILVER
Silver needs to close over $1000.00 for $1150 - $1200.00 over the coming weeks. On the lower side the earlier resistance of $995.00 is the initial support with $968.00 as the support.
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-- Posted Friday, 3 March 2006 | Digg This Article

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