-- Posted Monday, 15 May 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD JUNE FUTURE -- $716.80	COMEX SILVER JULY FUTURE -- $1435.00
EXPECTED TRADING RANGE
GOLD -- $696.60 -- $752.30	SILVER -- $1313.0 - $1550.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $378.50 - $425.40	NYMEX CRUDE OIL JUNE  - $70.80 - $76.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.10,100 - Rs.11,050	Rs.20,600 - Rs.24,600
COPPER JULY FUTURE	CRUDE OIL MAY FUTURE
Rs.378.90 - Rs.414.80	Rs.3,140 - Rs.3,410
GENERAL MARKET CONDITIONS
“Ever try to dress up a pig, sooner or later the make up cracks”. The 2005 make up of the US economy is cracking as the greenback nears the marina trench (the lowest point in the Pacific Ocean). Spot gold rose $30.60 week on week. Spot silver also reached a high of $1522 the previous week. Base metals are all firm while crude floats over $70.00 a barrel.   Treasury yields are on the rise in every part of the world. As the US dollar depreciates, treasury yields are also rising. US 10 year yields could rise to 5.60% - 5.75% over the coming week. This could imply weaker equity markets as well as a slower rise in commodity prices. Treasuries which are more or less an untouchable investment may once again acceptance as a mode of investment. Fund manager and retail investors are churning their short term portfolio with the fall in treasury prices. The double whammy for equity bears could the sharp reduction in liquidity of developed nations.   It’s the commodity stocks and bonds that are partly responsible for the rise in global equity markets. If there is any short term minor correction in commodity prices, commodity stocks and bonds will fall at double the pace, pinching the equity markets even, more.   We have the Soccer world cup next month in Germany. The Soccer world cup should further boost the Eurozone economy due to higher tourist arrival. The ECB will continue to raise interest rates by even half a percentage point in 2006. As the interest rate differentials narrow, the US dollar could take further pounding unless ECB officials and Bank of Japan officials threaten to intervene. A weaker US dollar results in carry traders increasing their active. Atleast ten to fifteen percent of the daily volumes in gold, silver, copper and crude oil futures is due to carry trade activity. A weaker US dollar will only support gold and silver prices.   Base metals like copper, zinc, Aluminum, nickel, steel and the rest are the followers of Michael Schumaker. There have been calls for a correction in base metals. Fundamentals justify further gains in base metals unless there is a global recession, which seems highly unlikely for the time being. India is an infrastructure deficient country. Though the quality of roads and the number of highways are the rise, but there is severer electricity country in India. Large parts of rural India face power outages of more than twelve hours a day. With passing of each day, there is a higher investment in infrastructure. To build roads, power plants, houses we need more steel, copper, aluminum, cement etc. The per capita income as well as savings of Indians are on the rise due to higher employment and equity markets. The end result in higher domestic demand in India. If I take a peek into the order in hand book of Indian companies there are hands full till 2009. This is being witnessed not just in India, but in China, rest of Asia, Europe and other parts of the world. How can base metals fall? There could be some short term correction in base metals due to liquidation of long position by hedge funds. But long term bullishness remains intact.   There could be some further correction in gold and silver prices due to technical factors Sharp pullbacks should be used an opportunity to go long as the momentum is certainly bullish. Volatility will increase even further this week due to the US CPI, PPI number. Geopolitical risk and inflationary pressures pose uncertainty and are still present. These are key factors for higher precious metals prices.
GOLD
Gold faces resistance between $730 - $735 and a break of which will result in $782.50 and $812.50. There is an initial support at $709.80 and $700.20. The key intra week support stands at $690.90 and a consolidated fall below the same will result in $673.40 and$655.90.
SILVER
Silver needs to break $1458 and $1488 for $1522 and $1550. On the lower side $1421, $1397 are initial support levels with $1378 and $1326 as the key weekly support levels. A consolidated fall below $1326 will result in $1266.
For SMS service on MCX & NCDEX trading strategies, please mail sms@insigniaindia.com
For Multi Commodity Exchange of India (MCX) reports as well as NCDEX reports on
metals as well as agri commodities please register at www.insigniaindia.com/register.asp
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 Monday, 15 May 2006 | Digg This Article

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer