-- Posted Tuesday, 6 June 2006 | Digg This Article

 

GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $641.00	COMEX SILVER JULY FUTURE -- $1194.00
EXPECTED TRADING RANGE
GOLD -- $609.40 -- $672.00	SILVER -- $1122.0 - $1260.50
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $326.40 - $376.30	NYMEX CRUDE OIL JULY  - $68.20 - $74.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD AUGUST FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.9,375 - Rs.9,860	Rs.17,800 - Rs.19,750
COPPER JULY FUTURE	CRUDE OIL JULY FUTURE
Rs.332.80 - Rs.385.40	Rs.3,320 - Rs.3,600
GENERAL MARKET CONDITIONS
Gold, silver as well the equity markets sold off after the Fed chairman Bernanke indicated that the Fed could  raise interest rates by a quarter of a percentage in its end June meeting. He downplayed the recent weakness in economic data by saying that we are entering into a period of transition and that the recent moderation in growth is “anticipated. The US dollar gained against the major currencies as Euro for another day failed to break 1.30. The European central bank is expected to raise interest rates by a quarter of a percentage this week.  Gold and silver have sold off for another day but are still trading above the key technical indicators. There are sellers at every rally and more and more being created now. It’s all about liquidity for gold and silver. The fall in global equity markets results in retail investors exiting their mutual fund investments and the fund managers have to sell equities to repay the money back to the investors. Liquidity pressures create a chain reaction in every market. These pressures may continue for the time being unless there is clear direction of global interest rates.  The Fed is caught between the devil of interest rates and the deep sea of inflation. It needs maintain balance so that higher interest rates does not affect US growth and consumption in a big way and at the same time inflation is controlled. History suggests that most of the central have raised interest rates more than needed only to reverse some of the hikes. We expect the Fed to raise interest rates even after June. Crude oil prices are still above $70 a barrel and are not showing any signs of falling below $70 a barrel. Higher crude oil prices will slow down global growth in the coming years. Gold and silver will rise despite everything.  There is lack of major market moving economic news. It will be more of a technical trade. Gold can fall to $580- $585 before the next leg higher while silver can test $980 - $1000 over the next two to three months if they fail to hold key technical supports of $614 and $1132 and the sell off in the global equities continue. The direction of global stock markets will be the key for gold and silver for the rest of the week.
GOLD
Gold can test $609.65 and the 100 day MA at $598.60. On the higher $650 and $662 are the resistances levels. Support stands at $635.60 and $625.
SILVER
Silver can test the 100 day MA at $1116 and key short term support at $1060. The initial support is at $1188. On the higher side $1220 is the initial resistance with $1266 and $1310 as the key resistance levels.
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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 Tuesday, 6 June 2006 | Digg This Article

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