A break out of the recent trading range of $582-$594 for gold and $1112 - $1152 range for silver is in the offing anytime soon. Gold and silver have been trading in this range for quite for the past two weeks. Gold and silver have risen due to strong physical demand from different parts of the globe and crude oil prices floating over $60 a barrel. The US dollar has gained but continues to trade in a range against the major currencies.
Investors are confused over reports of slowdown in global economy for 2007. As a result volatility in commodities, equities as well as bonds has considerably increased. Investors are not sure whether it is a mid-cycle slowdown or a more robust end of cycle altogether. Bond dealers, seem to be preparing for economic cooling. Stock markets are moving ahead fairly steadily, driven by robust merger and acquisition activity and continuing expectations of strong earnings growth. Similarly, a significant slowdown in the United States could hurt the dollar by depressing interest rates, and therefore returns. But at the same time if other economies also slow down then it could boost the dollar by making it a safe haven. Unless a clear picture for global growth prospects appears for october to december quarter as well for first quarter of 2007, gold and silver will remain volatile till there is breakout over the key short term technical resistances.
Crude oil will continue to dictate intra day moves for gold and silver. However rise in demand for gold will prevent any major losses for the yellow metal.
GOLD -- DECEMBER FUTURE
Gold needs to break $599.50 to target $614.50 and $622.50. On the lower side $586.50 is the initial support with $578.80 and $566.60 as the key short term support levels.
SILVER -- DECEMBER FUTURE
Silver needs to break $1162 for $1220. On the lower side $1137 is the initial support with $1112 as the key short term support.
Happy Profitable Trading
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