-- Posted Tuesday, 9 May 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $683.60	COMEX SILVER JULY FUTURE -- $1386.50
EXPECTED TRADING RANGE
GOLD -- $652.50 -- $702.30	SILVER -- $1275.50 - $1492.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $338.50 - $382.40	NYMEX CRUDE OIL JUNE  - $66.82 - $75.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,650- Rs.10,225	Rs.18,600 - Rs.24,200
COPPER JULY FUTURE	CRUDE OIL MAY FUTURE
Rs.316.90 - Rs.382.20	Rs.3,008 - Rs.3,410
GENERAL MARKET CONDITIONS
Gold and silver experienced some two way movement. Gold June future reached a high of $688.20 while silver July future reached a high of $1411. Crude oil fell below $70.00 a barrel after Iran said it was seeking ways to ease tensions with the U.S. over the Islamic republic's nuclear program. Iranian President Mahmoud Ahmadinejad wrote a letter to U.S. President George W. Bush proposing ``new ways'' to improve relations between the two states.   US president’s Bush chair is on a shaky ground. The CIA chief has resigned. The US dollar has depreciated significantly in 2006. The US casualties in Iraq are mounting with passing of each day. Mr. Bush‘s ratings are at an all time low in his six year tenure. There are economic woes of  trade and budget deficit that the US economy has been burdened. What does Mr. Bush do to divert the attention? In our view begin with sanctions on Iran followed by an armed attack on Iran. UK prime minister’s Tony Blair’s chair is also on a shaky ground. Mr. Bush will have the support of Mr. Blair as they both are in the same boat. Gold and silver will not fall for long.   Momentum in gold and silver are bullish. But the rise will be limited due to the Fed meeting and the US treasury forex report where China could be branded as a currency manipulator. The Fed will continue to raise interest rates but whether it will pause after the June meeting is what the markets looking forward. Higher crude oil prices may result in Fed raising interest rates if US economic numbers continue to be robust. These uncertainties will add volatility with the lower support base getting higher with passing of each week and month for both gold and silver.   Warren buffet has exited his silver and sold it to the ETF. It is the retail investor who is satisfied with an annualized return of twenty to thirty percent. Mr.Buffet has been hoarding silver since $4.00 an ounce. Silver ETF has resulted in large number of smaller investors who are yet to be a part of the commodity bull run, but want to be part of the same entering silver. In our view whenever there is a major correction of twenty percent in silver prices, Mr.Buffet and his followers will enter silver. Have the patience and use the sharp corrections in silver to go long.   Silver has the potential to rise over 70% from the current levels in the next twelve months. Gold can rise another 48% to 52% from the current levels over the next twelve months. But the risks are equally high. Is the worth the risk to make an investment? One can make further investment in gold and silver. There could be minor ten to twelve percent correction in gold and silver prices which should be used an opportunity to go long.
GOLD
Gold targets $702.40 if it breaks $690.00. On the lower side $773.50 and $668.70 are the initial support levels with $652.10 as the key short term support. Only a weekly close below $652.10 will result in further losses to $633.50 which is the key medium term support. Our view is that gold may target $702.40 and $735.00 but can still fall to $652.10.
SILVER
Silver needs to break $1452 for $1484 and $1551. On the lower side there is an initial support at $1351 and $1313 with $1220 as the key short term support.
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-- Posted Tuesday, 9 May 2006 | Digg This Article

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