-- Posted Tuesday, 23 May 2006 | Digg This Article

EXPECTED TRADING RANGE
GOLD -- $636.80 -- $696.00	SILVER -- $1169.0 - $1380.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $327.60 - $368.40	NYMEX CRUDE OIL JULY  - $68.40 - $72.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD JUNE FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,550 - Rs.10,200	Rs.18,200 - Rs.22,400
COPPER JULY FUTURE	CRUDE OIL JUNE FUTURE
Rs.327.80 - Rs.370.40	Rs.2,970 - Rs.3,400
GENERAL MARKET CONDITIONS
Gold and silver shed their intra day’s losses as more and more long term investors started buying at lower levels. Physical dealers had also started building up inventories of gold and silver on declines. Emerging-market stocks including India continued to fall as investors fled riskier assets because of sliding commodity prices and speculation about rising interest rates. Concerns that higher interest rates will slow world growth and curb demand for raw materials are hurting emerging market stocks. At the same time, drops in commodity prices are pushing the price of raw material producers lower. The Indian equity exchanges of Sensex and Nifty had took the maximum hit among the emerging market stocks.   There is risk readjustment and portfolio shuffling by fund managers as well as retail investors. The crash in the global equity markets has resulted in more investments moving into treasury prices as well as gold and silver. The crash or slide in equity markets of country is equivalent to a nuclear explosion in the financial markets of that country as the common man gets affected. Equity market slide, a global move towards stagflation due to ever rising crude oil prices, are all bullish news for gold and silver.   I had spoken to a large number of BSE and NSE brokers (Most of the MCX members are BS/NSE brokers) as well as large investors all over India. They were nervous but were buying specific stocks on declines. Short sellers were selling at higher levels and there seems to be some large short positions being built up. Nervous retail investors took the rise in Indian equity markets to exit their investments. I had calls from some investors loosing around 18% of capital is two trading sessions, despite investing in blue chips stocks. We are bullish on Indian equity markets and would rather use the fall as an opportunity to reinvest in specific stocks with a long term perspective. Long term fundamentals of Indian economic growth cannot change in a week’s time. Sensex at 19,000 – 20,000 still looks a possibility in 2007. Today Sensex and Nifty could come under more fire if the Asian equity markets continue their slide.   Gold and silver are bullish in the long run. There are no two thoughts over the same. However the pace of rise of gold and silver will slowdown as compared to the rise between January 2006 and now. Investor’s preference can switch from interest rate sensitive factors to geopolitical and safe haven factors any time. In the short term the successive higher base is getting lower with passing of each trading session which is a signal that there could be further losses if there is a fall below key technical levels. Carry traders will dictate gold and silver levels today. Expect higher volatility.
GOLD
Gold has an initial support at $649.10 and a consolidated fall below the same will result in $638.70. The short term key support is at $631.80. Despite the fall I will still prefer to buy on dips with a stop loss of $20. The upside is open with $674 and $696 as the key resistance levels.
SILVER
As long as silver holds $1198 the downside will remain limited and a consolidated fall below the same will result in further losses to $1142. The upside is open with $1275 and $1330 and $1383 as the key resistance levels. Despite the fall I will still prefer to buy on dips with stop loss of $50.
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prices of specific currencies, precious metals, base metals, or equity indices reflect the views
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Prepared By Chintan Karnani. Web Site:www.insigniaindia.com

-- Posted Tuesday, 23 May 2006 | Digg This Article

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