-- Posted Friday, 16 June 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $589.00	COMEX SILVER JULY FUTURE -- $1033.00
EXPECTED TRADING RANGE
GOLD -- $560.20 -- $5602.40	SILVER -- $970.20 - $1133.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER JULY -- $292.30 - $336.30	NYMEX CRUDE OIL JULY  - $67.80 - $72.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD AUGUST FUTURE/10 GRAMS	SILVER JULY FUTURE/KG
Rs.8,520- Rs.9,120	Rs.14,900 - Rs.16,900
COPPER JULY FUTURE	CRUDE OIL JULY FUTURE
Rs.309.60 - Rs.352.00	Rs.3,190 - Rs.3,360
4-5 MONTHS TARGET
GOLD: $650 - $655	SILVER : $1250 - $1300
GENERAL MARKET CONDITIONS
Mr.Bernanke does it once again for gold, silver, copper as well as equity markets. Last time he was responsible for the crash. This time he is responsible for the recovery. Ben Bernanke, Federal Reserve chairman, eased nerves with a measured assessment of the threat posed by higher energy prices to inflation and growth. Mr Bernanke zeroed in on the sustained increase in energy prices as one of the root causes of the recent inflation scare, and pledged to keep a careful watch on inflation expectations. But he did so in a calm tone, without the aggressively hawkish language that rocked markets on June 5. Mr Bernanke said: “These developments bear watching.” This was a relatively gentle phrase, compared with the description of inflation expectations in the last Fed minutes as “worrisome”. Gold and silver fell towards the close as gold August future settled at $570.30, silver July futures settled at $997.00.   Gold August futures rose to a high of $589.00 and silver July futures rose to a high of $1033.0 in Asian trade. Asian equity markets have also rallied today. The Sensex will also try to break the 10,000 market and also close over it on broad global equity rally. It’s all boil’s down to liquidity. Higher stock markets results in higher commodity prices ands vice – versa. Whenever margin pressures reduce equity markets as well is commodity markets rise. There are concerns that Japanese money is moving away from all the newly created asset classes and bank of Japan will raise interest rates either in July or towards the end of 2006. When bank of Japan is the liquidity reducer, the Fed may replace bank of Japan as the global liquidity provider towards the close of 2006.  The yen carry trades will be replaced by US dollar carry trades in a big way from 2007. Gold and silver will be unfazed by the changes in global liquidity cycles. In the short term correction’s or pullbacks should be used as opportunity to enter gold and silver.   Gold and silver are still not out of the woods and need higher close for two consecutive weeks for short term rally. There will be chain reaction if gold and silver rise from here. Shorts will get squared. Physical dealers will start to build up their inventory. Indian festival time will begin from July. Indian physical dealers in Mumbai, Ahmedabad, Chennai, and New Delhi have slowly started to increase their inventory in gold and silver. London AM and PM fixing’s are also higher suggesting UK trades are also buying gold and silver. Valuations are very attractive in gold and silver. Cyclical less demand for gold and silver will be over this month. Gold and silver will rise. But there will be higher volatility as at higher levels traders will get out of some of the long positions. It’s better to use bull and bear spreads to reduce risk.
GOLD
Gold needs to close over $602.80 to target $638.10 next week. On the lower side the earlier resistance of $578.60 is now the initial support with $557.80 and $545.40 as the key short term support level.
SILVER
Silver faces initial resistance at $1060. A close over $1128 will result in further gains next week. On the lower side $1008 is the initial support with $932 as the key support level.
Happy Profitable Trading & A Great Weekend.
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 Friday, 16 June 2006 | Digg This Article

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