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

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $554.30	COMEX SILVER MAY FUTURE -- $1031.00
EXPECTED TRADING RANGE
GOLD -- $542.80 -- $570.00	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
It’s is the storm before the calm as Gold and silver consolidated with a firm bias yesterday. Gold April future rose to a high of $557.20 and silver May future rose to a high of $1043.50 before settling lower at $556.10 and $1036.20. Crude oil prices fell below $62.00 a barrel while the US dollar also traded in a range.  There is once again renewed interest of hedge funds in metals particularly silver and copper as the Asian summer approaches. There is higher demand for these levels in summer as industries prepare for demand. The bank of Japan has said that it will not raise interest rates in the near future, which is a signal that the huge Japanese surplus liquidity is here to stay. 2006 will better 2005 as far as far as the rise in commodities prices are concerned. Only if there are signals that there is a sustained slow down in Chinese economy or the US economy that commodity prices including gold, silver, copper will fall else the medium to long term bullishness remains intact. We expect commodity prices to peak in January 2007 and thereafter a slow and steady decline before the next leg higher till 2009.  There is lack of consensus on the way to resolve the Iran issue. Everybody is saying different things. There may be lot of talks which is going behind the table which we do not know. Crude oil is floating above $60.00 a barrel on concerns over Nigeria supplies. There are geopolitical risks on the crude oil producing nations such as Iran, Nigeria etc which could lead severe supply disruptions at any point of time. Crude oil prices are expected to remain firm unless these risks subside. If crude oil prices do not show a sustained fall, then gold and silver prices will also remain firm. Global inflation numbers may not be higher because of higher base effects and revisions. In the short term we cannot look at inflation and judge the future of interest rates as well gold prices.  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 $1080. 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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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
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-- Posted Tuesday, 21 March 2006 | Digg This Article

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