It’s has been one of the most volatile week for gold this week in 2006. Overall gold traded with a weaker bias but there was some big two way movement. Gold and silver fell in line with the global equity markets. Gold August future fell to a low of $624.10 while silver September future fell to a low of $1090.50. The yen has weakened against the US dollar. The weakening of yen and the fall in gold and silver indicates the effect of yen carry trades on precious metals.
Copper nosedived yesterday and the fall in copper prices resulted in god and silver also falling. Copper fell, on speculation that mine owners in Latin America will avoid labor disputes that threatened supply. BHP Billiton, the world's biggest mining company, said it may negotiate wages at its Escondida mine in Chile for the first time. Grupo Mexico SA earlier resolved a stoppage at its Cananea copper mine, the largest in Mexico. Global copper production in April exceeded demand by 16,000 tons as usage fell in China, the world's largest consumer. Copper fundamentals do not even justify the current prices and that copper prices should fall atleast 15% to 20% from the current levels to be near fundamentals. Any global slowdown could result in short term bearishness for copper. LME 3 month copper could near $6800 -$6900 per tonne over the coming weeks. Gold and silver will soon be de linked from base metals.
Israel has decided air power alone will not be enough to drive Hezbollah back from the Israeli-Lebanon border and that a ground force will be needed to establish a zone that is at least 20 miles deep, senior military officials said. Israel wants to send a strong message to all its enemies, especially Iran, that the consequences of attacking the Jewish state will be unbearable. The US is using Israel as pawn to pressure Iran by not criticizing Israel. Lebanon, Syria and Iran are not friends of US and its allies. . It’s difficult to comment on the Israel, Lebanon crisis. But markets will not get carried away by the Middle East crisis unless there is war between countries. Gold and silver bulls got carried away on Monday and got bumped off.
Gold needs to close over $644.80 and silver over $1135 for further gains else it will consolidate. The Fed and most of the US economic numbers are behind us. There could be some weekend demand which will support precious metals.
GOLD
Gold needs to hold $610.00 on closing basis. There is an initial support at $618.80 and $605.40. On the higher side $632.50 and $637 are the initial resistance zone with $644.80 as the key short term resistance.
SILVER
Silver has an initial support $1071 and $1041 with $1012 as the key short term support.
On the higher side $1120 and $1135 are the initial resistance with $1170 as the key short term resistance.
.
Happy Profitable Trading
For SMS and Yahoo support please mail at sms@insigniaindia.com
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 employeeshave any liability
for any losses incurred in connection with any decision made, action or inaction taken by any
partyin reliance upon the information provided in this material; or in any delays, inaccuracies,
errors in, or omissions of Information.
Prepared By Chintan Karnani. Web Site:www.insigniaindia.com
1080-81, Ugger Sen Street,”Somani Bhawan”
Sita Ram Bazar, New Delhi-110006. India.
Ph: [O] 91-11-30919880 [M] 09811139549
Website: www.insigniaindia.com
Email: chintan@insigniaindia.com
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
