-- Posted Monday, 20 March 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $556.40	COMEX SILVER MAY FUTURE -- $1039.50
EXPECTED TRADING RANGE
GOLD -- $546.20 -- $575.00	SILVER -- $1008.50 - $1076.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MAY -- $228.60 - $242.60	NYMEX CRUDE OIL MARCH  - $60.40 - $64.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MAY FUTURE/KG
Rs.7960 - Rs.8230	Rs.14330 - Rs.14880
COPPER MAY FUTURE	CRUDE OIL APRIL FUTURE
Rs.224.30 - Rs.232.35	Rs.2720 - Rs.2900
GENERAL MARKET CONDITIONS
Silver is following copper as hedge funds try to get a firm over it and it outperforming gold and other precious and base metals. Silver May future rose to a high of $1045 last Friday. Spot silver has been rising at an average rate $1.00 a month since december 2005. Silver closed November 2005 to $8.25, it closed December 2005 to $8.82, January 2006 at $9.85, February 2006 at $9.75 and in March it’s already reached a high of $10.45. Silver is rising on exchange traded funds (ETF) news, higher demand from industrial users in Asia. Like gold and copper there is no variety in silver and it’s very easy to buy physical silver and store it as an investment in strong rooms or give it to ETF. The underperformer of 2005 is now starting to become the shining star of 2006. It’s going to rise and rise further in the near term, no doubt about it. But I always ask my clients to remember 8th December 2004 and 9th December, 2004 when spot silver crashed from $7.80 to $6.56. A fall of $1.27 in two trading sessions. A similar situation can be expected in silver over the next four to six weeks even if spot silver rises to a high of $12.00.  Gold is more dependent on geopolitical risk, Asian demand, global inflation etc. Geopolitical risk are expected to continue till US president George Bush is in power as he likes to dig US nose on very small and big matter of the world. At the moment it’s Iran and Middle East. Once Iran is over, it could be North Korea, China and Taiwan. Traders are not taking China-Taiwan issue very seriously. But in our view it could be the next hot geopolitical debate over the coming months and years.   As developing nations move from the developing category to developed category, there will be more demand for gold as per - capita income in these nations (including India) rises. We Asian love to wear gold and invest in gold. Population as well as Income in India and rest of Asia is on the rise. If I take the case of India, savings are being invested in equities (whether through mutual funds or direct), real estate and now in commodities. People are able to make a fast buck on their investment. Nearly 60% of this fast buck is spent and the rest saved. This whole chain reaction is resulting in higher spending, higher employment as well as higher investment which is pushing the Indian GDP growth rate to near double digit. If it‘s happening in India, its happening in China, Pakistan, South east Asian nations. Gold prices will be on the rise on the long term. There will be sharp pullbacks in the near term to medium term which will not alter the long term bullishness of gold.  As the US dollar depreciates, one needs to vary of the carry trade which will further support gold and silver bulls. Considering the fragile geopolitical situation, gold and silver are expected to trade higher. Sharp pullbacks (if any) should be used as an opportunity to go long.
GOLD
Gold needs to break and close over $558.00 - $563 zone for $575.00 - $580 zone. On the lower side $550.00 is the initial support with $542.80 and $534.00 as the key short term supports.
SILVER
Silver targets $1060 and $1082. As long as $1010 holds on closing basis there is every possibility of $1100 over the coming weeks. A consolidated fall below $1010 will result in $994.00 and $968.00.
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Happy Profitable Trading
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
of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability
for any losses incurred in connection with any decision made, action or inaction taken by any
party  in reliance upon the information provided in this material; or in any delays, inaccuracies,
errors in, or omissions of Information.

-- Posted Monday, 20 March 2006 | Digg This Article

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