-- Posted Wednesday, 26 April 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $633.50	COMEX SILVER MAY FUTURE -- $1275.00
EXPECTED TRADING RANGE
GOLD -- $614.10 -- $660.60	SILVER -- $1172.50 - $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.9,050- Rs.9,800	Rs.17,000 - Rs.24,500
COPPER MAY FUTURE	CRUDE OIL MAY FUTURE
Rs.314.35 - Rs.380.20	Rs.3,150 - Rs.3,550
GENERAL MARKET CONDITIONS
Gold, silver, copper and other precious as well as other base metals pared all the losses and are set to create further highs. June gold reached a high of $638.00 yesterday just before London pm fixing before settling lower at $634.20. Silver May reached a high of $1284.00 as I prepare this report. Copper may futures hit another record high of $334.00. The US dollar weakened despite gains in consumer confidence and home sales. Crude oil are firm despite inspite of US President George W. Bush ordering that deliveries to the nation's emergency reserve be suspended, adding supply to the market at a time of near-record prices.   Copper spiked after inventories sunk to 2½ days of current global consumption and supply concerns have intensified as strike action continues at Grupo Mexico’s facilities and other mines around the globe. The sudden spike in copper resulted in shorts gets covered. China's first-quarter metals trade figures showed signs of firming copper demand, driven by power sector demand for copper cable, despite sharply lower imports compared with 2005. Net imports of copper by China, which consumes a fifth of the world's production, increased to 39,760 tonnes in March from a net 32,825 tonnes in February, despite increased exports attributed to the State Reserve Bureau. As far India is concerned the per capita consumption of copper is less than one fifth of global average and India is a net exporter of copper. Just envisage a situation when India starts drinking more copper. LME cash copper prices could near $10,000 a tonne over the coming months. If copper rises so will aluminum and molydenenum but in greater proportion.   It’s more of the carry traders which are now jumping in the bandwagon to further support gold and silver bulls as the US dollar weakens. As the greenback weakens there will higher volatility in gold and silver as the carry traders are intra day or short term traders, quick to get in and quick to get out. Long term traders who have yet to invest are investing on dips. The global inflation will be high because of lower base effect. However over the coming years the higher base effect will result in lower inflation. Gold, silver and other precious metals are moving on their own and not linked to inflation and other economic parameters.   We have been receiving calls from an average person on the street in India who want to invest in physical gold. The average demand varying from 100 grams to a few kilograms. We Indian have a genetically lust for gold more of which is in the form of jewellery.  It’s more of the Indian youth in the age group between 25- 40 years who have become investment savvy and are investing heavily in physical gold than the oldies. The salary of Indian youth is rising at lightening speed as India shines. Physical dealer are stocking themselves upto 300% of average demand so that they can take advantage of ever rising prices. These are all indications of even greater demand from India, the graph of which will not show any signs of retracement. Scrap sales of gold and silver from India will end soon.   The momentum is certainly bullish. The bottom in gold and silver could have been formed, although it’s still early to call for the same. Better to use a combination of bull and bear spreads and knock out options for higher gains and relatively less risk both in gold, silver as well as copper. Options traders should thinking of buying far dated call options of $835.00 for gold and $2500.00 for silver as the premiums are relatively low.
GOLD
Gold needs to break $652.00 - $655 zone for $735. On the lower side $623.60 is the support with $614.10 as the key short term support. Only a consolidated fall below $614.10 will result in $600.00 and $593.80.
SILVER
Silver once targets $1450.00 - $1500.00 for $1650.0 if it breaks and closes above $1332.00. On the lower side there is a technical congestion between $1220.00 and $1246.50 and further between $1160.00 and $1172.50 both of which are holding well.
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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
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-- Posted Wednesday, 26 April 2006 | Digg This Article

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