-- Posted Thursday, 4 May 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $667.00	COMEX SILVER JULY FUTURE -- $1371.00
EXPECTED TRADING RANGE
GOLD -- $644.10 -- $682.70	SILVER -- $11286.50 - $1452.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $316.80 - $352.40	NYMEX CRUDE OIL JUNE  - $71.40 - $77.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,450- Rs.10,000	Rs.18,600 - Rs.22,800
COPPER JULY FUTURE	CRUDE OIL MAY FUTURE
Rs.304.35 - Rs.342.20	Rs.3,008 - Rs.3,410
GENERAL MARKET CONDITIONS
This is not a market for the retail investor! That’s all I can comment on yesterdays slide on gold and silver prices. Gold June futures reached a high of $679.80 in Asian trade while silver July futures reached a high of $1452.00 in Asian trade. Gold June future fell to a low of $660.00 while silver July tumbled $1320 before settling lower at $668.50 and $1379.50 respectively. Japanese and Chinese traders were not present in the market. The rise in gold, silver and other precious metals can be partially attributed to the liquidity overhang created by bank of Japan over the past fifteen years, if I try to dig deep in to the causes for the yesterdays slide and the one a fortnight ago. In the rest of 2006, the Bank of Japan is expected to raise interest rates, the excess global liquidity will vanish which reduce the current pace of rise in gold and silver prices, without altering the long term bullish direction. Central banks have a tendency to raise interest rates more than once.   Crude oil futures fell after the U.S. gasoline inventories rose for the first time in nine weeks, easing concern refiners won't be able to meet summer demand. Barring any major geopolitical supply shock crude oil may trade soft. However the Iran issue is still not out of the woods and the US hurricane season is nearing. We do not expect any major fall to $60.00 a barrel and below over the coming weeks and I will be buyer under $63.00 a barrel as $84.00 or $100 a barrel still looks a reality.     The more gold and silver rise everyday, the volatile they will be. There will be even more volatile over the coming weeks and yesterday’s example was yet another example of the things to come.  If a retail investor cannot take a risk of $5.00 an ounce in silver, its better for him to invest in ETF or through an asset managed company. The same applies with gold and other base metals as well. Stop losses are useless in both gold and silver at the moment. It’s better to reduce the lot size and keep on booking profits on the open positions.   Gold and silver are moving on a combination of technical factors as well as momentum play. Fundamentally there is lack of demand in both gold and silver. The current volatility is a message for gold and silver physical dealers who have been aggressively buying at every level on expectations of a price rise everyday. This will reduce their demand. Gold and silver may consolidate today before rising tomorrow. Depending upon on the technical support, if there is a major slide today, one can still buy with a stop loss as tomorrow is weekend and traders will prefer to go long than short.
GOLD
Gold needs to break $669.40 for $679.80 and $687.60. On the lower side there is an initial support at $662.00 while $652.30 and $644.30 as the key weekly support levels. A fall below $644.30 will result in re test of $633.30 and $622.50.
SILVER
Silver needs to hold $1327.00 to prevent a slide to $1286 and $1179. On the higher side $1391 and $1405 are the initial resistance with $1452.00 as the key resistance level.
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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 Thursday, 4 May 2006 | Digg This Article

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