-- Posted Monday, 24 April 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $637.50	COMEX SILVER MAY FUTURE -- $1306.00
EXPECTED TRADING RANGE
GOLD -- $604.30 -- $660.60	SILVER -- $1220.00 - $1450.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MAY -- $308.40 - $400.40	NYMEX CRUDE OIL JUNE  - $70.40 - $80.60
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER MAY FUTURE/KG
Rs.8950- Rs.10,000	Rs.17,500 - Rs.28,500
COPPER MAY FUTURE	CRUDE OIL MAY FUTURE
Rs.304.35 - Rs.330.20	Rs.3,250 - Rs.3,650
GENERAL MARKET CONDITIONS
Precious metals as well as base metals are getting heated by the advent of the Asian summer. Spot gold rose to a high of $646.05 while spot silver rose to a high of $14.75.  Week on week gold and silver continue to have higher closing. Copper is the best performer among the metals as it rises $40 per week. It seems all the money of the world is moving into commodities and there are more waiting to enter if at there is a correction.   Crude oil prices are expected to near $100 a barrel over the comings months on expected supply disruptions and Iran. Crude oil refineries are running at more than hundred percent of capacity to meet ever rising global demand. Refiners need to perform maintenance checks on units and storage tanks With global warming on the rise, a Katrina or a Rita or any hurricane in the Gulf of Mexico could result in crude oil prices crossing the century mark. Asian demand will continue to rise as their governments will not pass on the rise of higher crude oil prices to the end consumer. Higher crude oil prices is the road to self induced long term global recession. I also do not expect bank of Japan to raise interest rates in the near term due to higher crude oil. If crude oil prices cross the $100 a barrel mark we expect gold to cross $1000 an ounce and silver to near $100 an ounce.   There is a possibility of financial sanctions/attack, if not an attack on Iran by US and its allies. Iran's accounts and financial institutions are in Europe. The U.S. wants non-Iranian banks to stop facilitating Tehran's money flow. US officials are trying to convince financial institutions not to deal with bad guys, because they're worried about their own reputations. Iran has shifted some accounts from Europe to Persian Gulf countries in anticipation of a squeeze. So US officials are now trying to convince Middle East countries to freeze/stop dealing with Iran. Financial restrictions "can have an effect on Iran's ability to acquire more technology and expertise from the outside." The net effect is that of Iran diversifying its money into physical gold and silver and withdrawing its investments from global paper instruments. How can gold and silver fall?   The US president George W Bush ratings are at an all time low in US. The US budget and trade deficits are on the rise. Higher crude oil prices may add to negative US savings rate. The value of the US dollar is depreciating. The US dollar has depreciated over the past few years against the major currencies as well as gold and silver. Crude oil is billed in US dollars and if crude oil is not billed in US dollars, the world reserve currency which is the US dollar is now being looked at, may not happen. Central bankers of most of the countries are futuristic and they have slowly started diversifying their foreign exchange reserves into other areas namely precious metals, high yielding treasuries of other countries. The sanctions or any armed attack on Iran will be due to political reasons and financial considerations will take a backseat. The first possible reason is to control crude oil, the value of the US dollar will remain rise. The second possible reason is to divert the attention of American public from higher inflation, interest rates, fuel prices to war and manipulate the media to increase the rating of US president George Bush.   I am singing the crude oil tune and it drives every financial market. In the short to medium term, its effect will not be felt, however in the long term the effect will be to cool the base metal prices. Gold and silver will outperform every market over the coming years.   The momentum is certainly bullish. There is lack of major market moving economic news this week. The focus of the market this week will be crude oil prices and geopolitical factors. However higher stop losses is the need of the hour as last Thursday’s silver slide can be repeated once again. The shrinkage in global liquidity is now in the back burner.
GOLD
Gold targets $735. On the lower side $614.10 is the initial support with $594.00 as the key short term support. Only a monthly close below $583.70 will result in further losses in May, which seems highly unlikely for the time being.
SILVER
Silver targets $1650.00 and $2500.00 over the coming weeks and months.  Only a monthly close below $1172.50 will result in further losses in May to $1062, which seems highly unlikely for the time being.
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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
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-- Posted Monday, 24 April 2006 | Digg This Article

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