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

GOLD	SILVER
COMEX GOLD FEBRUARY FUTURE -- $624.60	COMEX SILVER MARCH FUTURE -- $1285.0
EXPECTED TRADING RANGE
GOLD -- $618.80 -- $637.10	SILVER -- $1229 - $1356.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $290.00 - $307.80	NYMEX CRUDE OIL  DECEMBER - $60.15 - $65.10
NATIONAL COMMODITIES AND DERIVATIVES EXCHANGE (NCDEX)
GOLD JANURRY FUTURE/10 GRAMS	SILVER JANUARY FUTURE/KG
Rs.9008- Rs.9,200	Rs.18,400- Rs.19,200
STEEL JANUARY FUTURE	CRUDE OIL JANUARY FUTURE
Rs.18884.00 - Rs.19400.00	Rs.2,808 - Rs.2883.00
GENERAL MARKET CONDITIONS
The average volatility in gold and silver in 2007 should increase from that in 2006. Gold has traded in intra day range of $10-$11 while silver had an intra day trading range in $25-$30 range in 2006. We expect the average volatility in gold to increase to $15 and silver to $50-$60 in 2007. Interest rates, geopolitical risk, crude oil as well as global liquidity and inflation expectations will keep on changing in 2007. In 2006 there was not any major natural disaster despite being one of the warmest in history. These factors will keep bulls and bears on their toes with market sentiment changing off and on. Hence the reason for increasing the average volatility levels for gold and silver in 2007.   Further trading volumes in gold and silver should nearly double in 2007. At the moment most of the investors have maximum exposure of their investments in equities. In India, Asia and other emerging markets an annualized return of 20%-30% will not attract investors as they are getting a return of over 50% on their stock investments along with other taxation benefits. In India, some of the stocks have risen over 70% over the past four months. The same is on other emerging markets as well as developed markets. The BSE Sensex has risen nearly 50% in 2006 and the US markets have risen more than 20% in 2006. This performance may not repeated in 2007. When equity markets see a sustained fall, the investors in equity markets will be forced to switch over to commodities which includes gold and silver and trading volumes as well as volatility will rise to levels never seen in history in real terms.   US president George Bush before the state elections in November tried his best for sanctions in Iran, North Korea so that he could take a political advantage of the same. He ensured that geopolitical risk remain in the headlines. After his party’s defeat geopolitical risk subsided and crude oil fell as US companies were fully stocked for the winters. Now when oil demand rises in winters crude oil prices will rise and oil companies make a fortune. In 2007 before June when oil companies stock’s fall to their lowest levels it will be ensured by the politicians that crude oil prices fall. Clearly the nexus between oil companies and politicians.   Gold and silver are consolidating in wider range as traders square off their positions before Christmas and New Year vacation begins from Saturday. Crude oil prices and a US dollar will continue to dictate markets.
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 $1301 for $1339. On the lower side supports are at $1252 and $1224.
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 Thursday, 21 December 2006 | Digg This Article

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