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Asian Metals Market Update for 20th December, 2006



By: Chintan Karnani, Insignia Consultants


-- Posted Wednesday, 20 December 2006 | Digg This ArticleDigg It!

Precious Metals Market Update for 20th December, 2006

GOLD

SILVER

COMEX GOLD FEBRUARY FUTURE -- $626.20

COMEX SILVER MARCH FUTURE -- $1285.0

 EXPECTED TRADING RANGE

GOLD -- $621.40 -- $637.10

SILVER -- $1229 - $1356.00

COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE

COPPER MARCH -- $298.60 - $313.80

NYMEX CRUDE OIL  DECEMBER - $59.90 - $63.60

GENERAL MARKET CONDITIONS

  Fund managers ducked market sentiment by selling silver this week as the markets were expecting a correction after Christmas. Gold and silver continued to be dictated by technical factors and the US dollar. Gold has not yet fallen while in silver the fund selling seems to be over with passing of each day. Gold sand silver should consolidate at the current levels with the next higher move. US producer prices suggest that the Fed is not finished with interest rate hikes. Inflationary pressures with support gold apart from weaker US dollar. However all the bullishness in gold and silver are subject to technical factors. As long as gold December holds $614.30 and silver march holds $1224 on closing basis the downside will be limited.

 

We all know that the current rise is due to liquidity factors and that any selling by fund managers could create turbulence in the markets. All stop losses are useless in such markets as they are bound to be hit. While making investments in any financial product one should determine his risk appetite before hand so that trailing stop losses if needed can be used to minimize losses.  Investment’s are not invincible and all investments do not result in profit, stop losses come in handy may a times. I am writing this for the Indian traders some of whom never use stop losses and exit only when they do not have margin money. There are still investors who have are long in gold MCX over

INR Rs.10, 000 per ten grams and will not exit unless gold falls below INR Rs.8500 per ten grams, a similar situation is in silver.

 

 Venezuelan leader Hugo Chavez is directing a growing share of the country's oil profits into euros as the dollar and crude prices fall. Venezuela and oil producers from the United Arab Emirates to Indonesia plan to funnel more money Euro. Banco Central de Venezuela has slashed the percentage of its $35.9 billion worth of reserves invested in dollars and gold to 80% from 95% a year ago. Venezuela has boosted its euro holdings to 15%, from less than 5% a year ago. The share of foreign-exchange deposits held in dollars by OPEC members and Russia, the largest non-OPEC oil exporter, fell to a two-year low of 65% during the second quarter, from 67% during the previous three months, Bank for International Settlements figures released last week show. Another reason why one should invest in gold on dips and go short on the US dollar on rise.

 

The key short term technical levels in both gold and silver have held well and should hold for the remaining few sessions in 2006. The fear of hedge fund liquidation is more or less over  and that will every fall the risk to return ratio will be in favour of the buyer.

 

GOLD -- FEBRUARY FUTURE

  Gold needs to break $637.60 for $643.40 else it will trade in $618 - $635 range for the rest of the year. Only a daily close below $615.80 will result in further losses else the downside is limited.

SILVER -- MARCH FUTURE

 Silver needs to break $1339 to targets $1400. On the lower side supports are at $1252 and $1224.

 

For SMS and Yahoo support please mail at sms@insigniaindia.com

 

 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 Wednesday, 20 December 2006 | Digg This Article


1080-81, Ugger Sen Street,”Somani Bhawan”
Sita Ram Bazar, New Delhi-110006. India.
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