-- Posted Tuesday, 31 October 2006 | Digg This Article

GOLD				SILVER
COMEX GOLD DECEMBER FUTURE -- $605.40				COMEX SILVER DECEMBER FUTURE -- $1215
	Lower	Expected	Higher		Lower	Expected	Higher
BUY	582.50	599.00	615.20	BUY	1157.00	1199.00	1242.00
SELL	592.00	614.00	628.00	SELL	1180.00	1232.00	1290.00
EXPECTED TRADING RANGE
GOLD -- $595.50 -- $618.80				SILVER -- $1182 - $1256.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER DECEMBER -- $324.00 - $352.00				NYMEX CRUDE OIL  NOVEMBER  - $57.00 - $61.72
NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE  (NCDEX)
GOLD DECEMBER FUTURE/10 GRAMS				SILVER DECEMBER FUTURE/KG
Rs.8,860- Rs.9,140				Rs.18,225 - Rs.19,050
GENERAL MARKET CONDITIONS
Fund managers seem have woken up from slumber and reducing their investments in crude oil as the copper and have started taking notice of a slowing U.S. economy and thinning Chinese demand. Fund managers have started churning their portfolio’s as the bets on a weaker US dollar, higher crude oil and natural gas prices have gone against them. China imported 37.5 percent less refined copper at 69,801 tonnes in September 2006 than a year earlier, official Customs figures showed. Lower crude oil prices will translate into short term higher US as well as global growth over the coming months. Crude December future has a strong support between $55-$57 and resistance at $64.     Hedge funds have started increasing their investments in gold and silver as an hedge against fall in base metal prices. This implies that the downside risk for gold for the rest of 2006 remains limited to $562. Year on year copper is still higher the long term bullish trend for comex copper remains intact unless we see a daily close below $292 which at the moment seems highly unlikely. We are bullish on gold in the medium to long term. In the short term unless there is a sustained break over $640, the upside will be limited.   Zinc continues to outperform every metal as rises with passing of each day. Zinc prices reached a new record high of $4,190 a tonne on the London Metal Exchange. Zinc inventories dropped to their lowest level in more than a decade at 108,950 tonnes, down by 1,850 tonnes on the day and against average daily world consumption of about 29,000 tonnes. This equates to about four days worth of demand. Markets are buzz with speculation that LME zinc prices can target $5,000 a tonne. Zinc is one the prime components used in auto sector and auto ancillary sector. The Indian as well as the Chinese auto sector is growing at a very high pace. There is no substitute for zinc, unlike copper where aluminum can replace it. The trend is only upwards.   The US dollar as well as crude oil prices will continue to dictate gold and silver prices. In our view both have formed a short term bottom. Failure of gold to close over $604 will result in sellers at higher levels. Silver needs to hold $1199 on closing basis to prevent further losses. The trend is bullish but volatility will also increase as the week progresses.
GOLD -- DECEMBER FUTURE
Gold needs to break and hold $614 for further gains to $634. On the lower side $595.10 is initial support with $582.20 as the key support.
SILVER -- DECEMBER FUTURE
Silver needs to break $1228 for $1256 and $1290. On the lower side $1199 is the initial support and $1182 and $1157 as the key weekly supports.
Happy Profitable Trading
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-- Posted Tuesday, 31 October 2006 | Digg This Article

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