-- Posted Thursday, 21 September 2006 | Digg This Article

GOLD	SILVER
COMEX GOLD DECEMBER FUTURE -- $583.00	COMEX SILVER DECEMBER FUTURE -- $1098.00
EXPECTED TRADING RANGE
GOLD -- $572.60 -- $596.00	SILVER -- $1065 - $1175.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER DECEMBER -- $324.00 - $346.30	NYMEX CRUDE OIL OCTOBER  - $58.20 - $66.20
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD OCOTBER FUTURE/10 GRAMS	SILVER DECEMBER FUTURE/KG
Rs.8,530- Rs.9,140	Rs.16,600 - Rs.18,200
COPPER NOVEMBER FUTURE	CRUDE OIL OCTOBER FUTURE
Rs.334.00 - Rs.356.00	Rs.2,820 - Rs.2960
GENERAL MARKET CONDITIONS
Gold and silver fell after the Fed meeting while the US dollar weakened. Gold and silver December future fell to a low of $580.40 and $1092 against the previous day settlement of $586.20 and $1114.00. Oil prices dropped to a six-month low following another increase in US heating oil stockpiles. This has taken inventories to levels that are comfortably expected to cover any supply disruption or cold snap. High inventories of heating oil and natural gas has resulted in markets believing US is well stocked to meet demand this winter, even if there are prolonged cold snaps. Kerosene stocks in Japan, are also 20 per cent above year-ago levels. However markets trade in the future and it is the happening and non happening of certain events that drives traders and punters to place bets. At the moment is just fundamentals that is diving crude oil prices. I would prefer to buy some far dated call options in crude oil as well as gold and silver, as premiums are very low and long term bullishness remains intact.   FOMC meeting admitted that “inflation pressures are likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations and the cumulative effects of monetary policy actions.”  Coupled with a housing slump and the evidence is quite clear backing the notions of an end to the tightening policy for almost the past two years.  This could well mark the beginning of weakness in the US dollar. However lower crude oil prices may just temporary prevent the US economy from faltering for a short period of time.   Gold and silver are very volatile. In MCX gold October future was trading at INR 8816 and thereafter the next quote was INR 8875 eating away all the stop losses. The same is in comex future where one day gold rises towards comex close only to crash the next day towards close. Most of the traders are confused and do not know what to do. However the current volatility in gold, silver as well as crude oil and natural gas is just a tip of the iceberg as this is the second phase of the long term bull rally.   As far as gold and silver are concerned spot gold has managed to hold $572.00 on closing basis while spot silver has managed to hold $1060 on closing basis. If and only if gold and silver fall below these levels on closing basis, that we will see another round of thrashing, else the downside will remain limited for both of them.
GOLD -- DECEMBER FUTURE
Gold needs to hold on closing basis $578.80 to prevent a test of $566.60 and $546.30. On the higher side $586.50 is the initial resistance with $595.50 and $602 as they key short term resistances.
SILVER -- DECEMBER FUTURE
Silver needs to hold $1062 to prevent a fall to $1008 and $980. On the higher side $1012 is the initial resistance with $1052 as the key short term resistance. Only a consolidated break of $1152 will result in further gains to $1175 and $1220.
Happy Profitable Trading
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-- Posted Thursday, 21 September 2006 | Digg This Article

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