-- Posted Monday, 22 January 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD FEBRUARY FUTURE -- $636.50	COMEX SILVER MARCH FUTURE -- $1294.00
EXPECTED TRADING RANGE
GOLD -- $622.00 -- $650.10	SILVER -- $1252.0 - $1352.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $247.00 - $269.00	NYMEX CRUDE OIL  FEBRUARY   - $51.80 - $56.25
GENERAL MARKET CONDITIONS
The US dollar failed to find any buyers last week despite some positive economic numbers from US last week. Interest rate differentials is affecting every currency. Yen has weakened as bank of Japan did not raise interest rates. Markets expect the Fed to maintain status quo on interest rates and bank of England and the European central bank may raise interest rates over the next two to three months. Movements in currency markets affect countries dependent o export for their growth unlike India where growth is dependent on domestic demand. Foreign exchange markets are sensitive to interest rates which in turn is dependent more or less inflation. The correlation between inflation-interest rates- currency markets is negatively affecting the US dollar as arbitrageurs pounce on every opportunity. The biggest beneficiary is gold which has closed over key medium resistance of $636.0   US and Saudi Arabia are increasing their troops in Iraq on the pretext of guarding Baghdad and Iraq. The past two attacks in Iraq has been between mid February and April. The relationship between Iran and US and its allies is just the calm before the storm. The increased troops presence could be a way to pressurize Iran or a preparation of an attack. North Korea and Nigeria are the other geopolitical risk. The changes in geopolitical risk will affect short term movement in gold and silver. Fundamentally gold and silver are bullish.   In 2006 investors excessively leveraged their investment in energies and base metals which backfired. It is very difficult to specify a model portfolio in commodities. It is necessary to put trailing stop losses even on long term investments as markets have a tendency to overshoot or undershoot. Fundamentals are fine, but if markets slide it takes a long time for prices to recover and there is less return on investments.
GOLD -- FEBRUARY FUTURE
Gold needs to break $643.60 for $653.60. On the lower side support is at $621.60 and $611.00.
SILVER -- MARCH FUTURE
Silver needs to break $1325 for $1400. On the lower side $1252 and $1224 are the support levels.
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
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errors in, or omissions of Information.

-- Posted Monday, 22 January 2007 | Digg This Article

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