-- Posted Monday, 13 November 2006 | Digg This Article

INSIGNIA CONSULTANTS
Precious Metals Market Update for 13th November, 2006
GOLD	SILVER
COMEX GOLD DECEMBER FUTURE -- $633.00	COMEX SILVER DECEMBER FUTURE -- $1312.0
EXPECTED TRADING RANGE
GOLD -- $624.00 -- $642.70	SILVER -- $1290 - $1360.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER DECEMBER -- $292.00 - $324.00	NYMEX CRUDE OIL  NOVEMBER  - $57.00 - $61.72
MULTI COMMODITY EXCHANGE OF INDIA (MCX)
GOLD DECEMBER FUTURE/10 GRAMS	SILVER DECEMBER FUTURE/KG
Rs.9,080- Rs.9,270	Rs.19,050 - Rs.19,800
COPPER NOVEMBER FUTURE	CRUDE OIL NOVEMBER FUTURE
Rs.292.00 - Rs.321.00	Rs.2,620 - Rs.2840
GENERAL MARKET CONDITIONS
It’s China, China everywhere. China’s absence in global copper markets result copper tumbling while expectations of China’s presence in gold market resulted in gold rising. Quite a paradox! Any slowdown in China in 2007 will affect the base metals prices first. Financial markets react very swiftly to news. Any hints of a Chinese slowdown even by a few pips could unnerve the base metal prices in the short term. As investment in commodities rise in value terms, commodities markets will be getting wilder than ever seen in history. Compare the commodity market with the equity market. The equity market has hundred of companies but on a day some stocks rise some stocks fall. The same is happening in commodity markets. Speculators as well as investors have to choosy about the commodity they invest and there is the need to make informed decision, just like the stocks. In any day some of the commodities will rise and some will some fall. The reason that since the commodities are in secular bull market, all the commodities will rise and fall simultaneously is not applicable in the current market scenario.   Funds as well as retail investors are gradually increasing their investment in commodities. However the portfolio switching from commodity to another is happening at a rapid pace. Trading volumes are going up with passing of each day in every commodity exchange of the world. Last week gold and silver were volatile despite creating new monthly high. Traders are nervous as to how long the current rise in gold and silver will continue so they keep on booking profits quickly but at the same time since they do not want miss the next phase of the rally in gold and silver they buy on any major dip. Every trader is adopting a buy first sell next strategy for gold and silver. This is a cause of concern to me. Since everybody wants to buy gold prices rise due to lack of sellers. This is not a good sign in the short term as even a three percent to four percent drop in gold and silver prices will create panic among retail investors.     Gold's share of China's total reserves is relatively low at around one percent, so it would need to buy a large amount of bullion to bring it up to, say, five or 10 percent. This is not going to happen overnight. Any swift diversification away from the China US dollar will destabilize the global economy and affect every country including China. There are global imbalances with US consumer at the helm but the US economy will not move into overnight recession. The slump in US housing market is just an early warning signal of the things that might come. If Mr.Bernake is swift enough, he can delay the slowdown in US economy but not prevent it.   For the week apart from the technical factors, the US dollar as well as crude oil will dictate intra day prices. This week is the key for gold and silver. If spot gold is able to float over $636 for the whole week on closing basis then a retest of $730 could be reality over the coming months. The general sentiment in India is that speculators are very bullish in gold for December and January.
GOLD -- DECEMBER FUTURE
A close over $638.10 today will result in $657.20 and $679.90 over the coming fortnight. Initial support is at $630.0 and $626 with $618.80 as the key support.
SILVER -- DECEMBER FUTURE
Silver needs to break $1335 for $1430 and $1520. Support at $1290, $1277 with key support at $1256.
Happy Profitable Trading
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Disclaimer : Any opinions as to the commentary, market information, and future direction of
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
for any losses incurred in connection with any decision made, action or inaction taken by any
party  in reliance upon the information provided in this material; or in any delays, inaccuracies,
errors in, or omissions of Information.

-- Posted Monday, 13 November 2006 | Digg This Article

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