-- Posted Thursday, 1 June 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $648.30	COMEX SILVER JULY FUTURE -- $1245.00
EXPECTED TRADING RANGE
GOLD -- $633.30 -- $676.00	SILVER -- $1144.0 - $1360.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $326.40 - $396.30	NYMEX CRUDE OIL JULY  - $68.20 - $74.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD AUGUST FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,460- Rs.10,100	Rs.17,800 - Rs.20,100
COPPER JULY FUTURE	CRUDE OIL JULY FUTURE
Rs.332.80 - Rs.385.40	Rs.3,100 - Rs.3,500
GENERAL MARKET CONDITIONS
Gold and silver fell after Bush administration bowed to pressure on and said it was ready to join European allies in talks with Iran, on condition that Tehran first suspended its nuclear fuel programme. Gold August future fell to a low of $644.00 before settling at $649.00. Silver July future fell to a low of $1228.00 before settling at $1245.50. Copper July also fell in line with precious metals and settled lower at $362.40. The US dollar gained while crude oil prices still float over $70.00 a barrel.   Iran tensions are one of the reasons for the rise in gold and silver. It’s not out of the woods yet. Mr.Bush, Europeans, Chinese, Japanese keep on changing their tune on ways of a peaceful settlement to Iran’s nuclear ambitions. The war of words is continuing. The solution (whether war or otherwise) to Iran’s nuclear programme seems like a mirage in a desert unless it’s stamped by US president. Till then gold and silver will find buyers at lower levels as a measure of risk aversion.   There is very less physical demand in India of gold and silver. A traders who used to sell an average of 150 – 200 kgs of gold bars everyday, now sells between 15 – 20 kgs everyday. Such is intensity of lower demand. There are a few days for marriage days in June according to Hindu calendar, while there are no festival’s in India in June and July. Physical demand from India will be less, unless gold falls to a level which is attracts investment buying. Globally also June and July are the tourist season. Volumes from European and US traders reduce in these months. We Indian work all the year round. Volumes from India and rest of Asia will not reduce.   Tuesday’s and Wednesday’ move once again suggested that traders and investors are using the rise to exit their long positions. Then the short sellers who have been inactive have become active. Shorts are getting built up in every rise in gold and silver. Physical traders are buying gold and silver and selling MCX or Comex futures as an hedge, which they have refrained for the past seven months. Spot gold needs to hold $631.80 while spot silver needs to hold $1188 on closing basis to prevent a slide. Gold and silver will be very volatile. Better to use a combination of bull and bear spreads for higher returns and lower risk.
GOLD
As long as Gold holds $631.80 on closing basis the downside is limited. A close below $631.80 will result in $ losses to $609.65 and $588. On the higher side $657.90 is the initial resistance with $666.0 and $679.40 as the key short term resistances.
SILVER
Silver needs to hold $1188 on closing basis to prevent further losses to $1060. On the higher side $1266 is the initial resistance with $1310 and $1330 as the resistance levels.
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, 1 June 2006 | Digg This Article

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