-- Posted Monday, 27 March 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $559.30	COMEX SILVER MAY FUTURE -- $1076.50
EXPECTED TRADING RANGE
GOLD -- $550.60 -- $572.00	SILVER -- $1044.50 - $1110.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MAY -- $236.80 - $250.20	NYMEX CRUDE OIL MARCH  - $62.80 - $66.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD APRIL FUTURE/10 GRAMS	SILVER MAY FUTURE/KG
Rs.8040 - Rs.8300	Rs.14900 - Rs.15800
COPPER MAY FUTURE	CRUDE OIL APRIL FUTURE
Rs.224.30 - Rs.232.35	Rs.2810 - Rs.2910
GENERAL MARKET CONDITIONS
This is the last week of the first quarter of 2006. Nothing unusual about this quarter except that silver, the ex poor man’s gold,  is now turning out to be better than gold as silver May futures rose to a high of $1078.50 today. Crude oil futures also reached near $65.00 a barrel on Nigerian supply disruptions. In the first quarter of 2006, the secular Bull Run in commodities continued. The next six month will not be the same for the bulls. There will be a tug-o-war between bulls and bears as demand for gold and silver will see a cyclical reduction while global liquidity may fall as more and more central banks raise interest rates. The factors favouring the bulls are rise in geopolitical threats, rise in natural calamities due to global warming, epidemics such as Avian influenza/Bird Flu and other unpredictable events apart from higher demand (physical as well as investment).  This will be the second meeting of the Fed under the new Chairman Ben Bernanke. Cyclical hot weather in US in first three months of 2006 has resulted in higher job creation particularly in the manufacturing sector. However data suggest a soft landing for the US housing sector over the coming months. This week will be all about Fed’s outlook on interest rates. We expect the Fed to raise interest rates till June 2006 and thereafter a pause and reduction in its November meeting. The effect on the currency market is that the US dollar may gain initially, but the negative bias with which the greenback started 2006 will be visible for the whole of 2006.  MCX silver May future reached a new high of INR 15395 on Saturday as the gap between costing and MCX prices reduced from INR900 to INR700. The rise in silver also helped gold.  The gap in silver is expected to be volatile this week. We expect the gap to fall in the region of 450 – 550 if silver continues its rise. However if there is a fall prices this gap will once again widen in 1000 – 1100 region. There are a large number of silver short positions in the region of 14250 – 14350 as well as 15000 – 15100. Some of these positions will be squared up if silver breaches INR 16,000 mark.  There may be some profit taking ahead of the Fed meeting which may drag down gold and silver. Higher two way movements are expected this week, although the bull will dominate. Sharp pullbacks (if any) should be used as an opportunity to go long.
GOLD
Gold targets $575 - $580 zone if it breaks $563.40. On the lower side $554.10 is the initial support with $547.80 as the key short term support.
SILVER
Silver targets $1089 and $1120. Silver has formed a higher support base at $1040.00 and as long as $1040 holds on closing basis the downside is limited. A consolidated fall below $1040 will result in $1018.00 as the next support levels.
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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
of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability
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-- Posted Monday, 27 March 2006 | Digg This Article

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