GOLD

SILVER

COMEX GOLD DECEMBER FUTURE -- $638.90

COMEX SILVER SEPTEMBER FUTURE -- $1233.00

 EXPECTED TRADING RANGE

GOLD -- $628.80 -- $652.50

SILVER -- $1192.0 - $1272.00

COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE

COPPER SEPTEMBER -- $352.40 - $378.30

NYMEX CRUDE OIL AUGUST  - $69.20 - $73.80

MULTI COMMODITY EXCHANGE OF INDIA (MCX)

GOLD OCOTBER FUTURE/10 GRAMS

SILVER SEPTEMBER FUTURE/KG

Rs.9,577- Rs.9,740

Rs.18,700 - Rs.19,700

COPPER AUGUST FUTURE

CRUDE OIL SEPTEMBER FUTURE

Rs.352.00 - Rs.372.50

Rs.3,360 - Rs.3,455

GENERAL MARKET CONDITIONS

It’s a combination of liquidity and currency carry trade that is driving gold and silver at the moment. Lower crude oil prices makes the market believe that the central banks are nearing the end of their interest rates hiking spree which has resulted in higher equity markets as well as metal prices. This is the liquidity factor. A weaker US dollar makes has resulted in resumption of yen carry trades supports gold and silver prices. It was in October –November 2005 that yen carry traders started the last year’s historical bull run in gold and silver.

Nickel continued to rise as the cash price of the metal spiked to $35,000 a tonne. London Metal Exchange nickel inventories rose 354 tonnes to 6,162, tones.  The supply situation is extremely tight as global inventories have shrunk to less than one day’s worth of world consumption. Three-month nickel rose 6.4 per cent to a record $29,200 tonne. Severe short covering further supported nickel prices. Nickel, traditionally is the most volatile metal and is not for the average man on the street. Nickel prices will rise as demand for steel will rise on demand from China and India. India is an infrastructure deficient country.  There are a large number of roads, housing and other infrastructure projects in the pipeline over the next 3-4 years in India. Demand for steel, nickel, copper, zinc and other base metals will continue to rise. Global new base metal capacities will start coming up only by the early 2009, till then there will be bouts of supply squeeze in base metals and speculators will make the most of it.

Iran is ready to discuss with the European Union the suspension of its nuclear activities, the country's Foreign Minister Manouchehr Mottaki said. We are even ready to discuss the offer on nuclear activity suspension, which we see as illogical,'' the state-run Iranian Students News Agency quoted Mottaki. The August 31 deadline is nearing. The war of words will continue till then. In our view there will be stalemate even after August 31 which will support gold and silver prices.

Fund managers and retail investors have started waking up from summer slumber and have started investing for the long term in gold and silver. Now is the best time for investment in gold and silver for the long term. Indian’s can plan their expected physical gold demand for the rest of 2006 and start purchasing gold on dips. The risk to return ratio is clearly in favour of the buyer. Lack of storms/hurricane in the Gulf of Mexico has also resulted in profit taking in crude oil prices. However traders will be on the alter on news of storms in the Gulf of Mexico.

GOLD

Gold needs to break $645.50 and $652.50 for $658.00. On the lower side $634.00 is the initial support with $621 and $618.80 as the key short supports.

SILVER

  Silver needs to break $1257$1259 for $1320. On the lower side $1224 is the initial support with $1200 as the key short term support.

Happy Profitable Trading

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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 

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