-- Posted Thursday, 27 July 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD AUGUST FUTURE -- $627.00	COMEX SILVER SEPTEMBER FUTURE -- $1115.50
EXPECTED TRADING RANGE
GOLD -- $608.20 -- $645.50	SILVER -- $1071.0 - $1170.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER SEPTEMBER -- $319.10 - $352.30	NYMEX CRUDE OIL AUGUST  - $72.65 - $78.10
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD AUGUST FUTURE/10 GRAMS	SILVER SEPTEMBER FUTURE/KG
Rs.9,310- Rs.9,770	Rs.16,650 - Rs.18,200
COPPER AUGUST FUTURE	CRUDE OIL AUGUST FUTURE
Rs.340.60 - Rs.372.90	Rs.3,440 - Rs.3,580
GENERAL MARKET CONDITIONS
Gold and silver rose after envoys meeting in Rome failed to agree on the terms of a cease-fire or who would participate in an international force for Lebanon, where eight Israeli soldiers were killed yesterday in a battle with Hezbollah. The diplomats, from the U.S., Europe and Arab countries, did say the United Nations should ``urgently'' authorize such a contingent. Nearly all the participants at a Rome conference called for an immediate ceasefire, leaving the US isolated, according to Arab officials. Gold August future rose to a high of $628.50 while silver September future rose to a high of $1123 in asian trade. A weaker also contributed to the rally gold and silver prices.   The Fed beige book said that in some of the Fed districts, there have been continued weakness in retail sales and except for “only scattered exceptions” activity in the housing market is also slowing.  Inflation pressures or increases in the prices of final goods and services have also remained modest.  However the report is clearly more supportive of a pause than a hike. The report indicates that US economy is still growing and that there has been significant activity in commercial real estate sales and industrial sector activity. Future economic releases will set the direction for the FOMC meeting on 8th August. We expect interest rates to be raised by the Fed next month and thereafter a pause. Please note that in 2006 even if US companies are not hiring aggressively, they are also not reducing workforce (Unlike 2005 where there was reduction of workforce by most of the large US companies). Growth in US economy will be there and higher than Eurozone and Japan, but consumption pattern will change due to higher crude oil prices and personal savings rate could further plunge. All factors pointing to a medium to long term weakness of the US dollar. In the short term interest rate differentials will support the US dollar.  Gold and silver will rise irrespective of the movement in currency markets.   China is making serious efforts to cool down its growth. The announcement of stricter rules for developing land coincided with the publication of a speech by Hu Jintao, China’s president, who reaffirmed the government’s resolve to “control the scale of fixed asset investment”. Tightening control of the release of land for development has emerged as one of Beijing’s key weapons to rein in the surge in investment behind economic growth of nearly 11 per cent in the first half of the year. Mr Hu’s concerns were focused less on the speed of growth than its poor quality, through over-investment in polluting, non-productive industries. China at the moment does not seem that it will be boom to bust story. China is trying shift from an export led growth model to a domestic consumption led growth model and the series of measures of the past few weeks is just the beginning of the same. Every country is trying to reduce dependence on US growth and US dollars for their growth. The end result higher gold and silver prices and a weaker US dollar.   The Israel, Lebanon and Hezbollah crisis could have serious consequences if it escalates further. It’s a part of the Bush administration to put more pressure on Iran to stop its nuclear programmed and also ensure Iranian oil continues to be billed in US dollar. Bush administration using Israel as pawn to pressurize Iran. The end effect is ever rising crude oil prices as well as gold and silver prices.
GOLD
Gold needs to break $632 for $637 and test key short term resistance at $645.50. A consolidated break of $645.50 will result in $658.60 and $676.50. On the lower side gold needs to hold $618.80 and $614.20 to prevent further losses to $603.00 and $592.00.
SILVER
Silver should break the shackles of recent trading range of $1180 - $1135. Silver needs to close over $1174 for further gains. On the lower side $1171 and $1141 are the key support levels.
Happy Profitable Trading
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errors in, or omissions of Information.
Prepared By Chintan Karnani. Web Site:www.insigniaindia.com

-- Posted Thursday, 27 July 2006 | Digg This Article

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