-- Posted Tuesday, 23 January 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD FEBRUARY FUTURE -- $634.30	COMEX SILVER MARCH FUTURE -- $1298.50
EXPECTED TRADING RANGE
GOLD -- $622.00 -- $650.10	SILVER -- $1262.0 - $1352.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MARCH -- $247.00 - $264.00	NYMEX CRUDE OIL  FEBRUARY   - $50.80 - $56.25
GENERAL MARKET CONDITIONS
It’s the carry traders that are dictating gold and silver prices at the moment in the absence of lack of major market moving news. The dollar is finding some support from the reversal in oil prices, but until crude makes another run for the $50 a barrel level, the impact may be limited. Meanwhile the Fed and Bank of England (BoE) published their semi-annual surveys on foreign exchange activity. According to the report, through the month of October, trading volume in London grew by 6% while trading volume in the US fell by 7.5%.  Although London has long been the most active trading center for foreign exchange, this new report reveals that an increasing amount of market volatility may now be concentrated in the London trading session in commodity markets as well as currency markets.   China announced plans to shift the usage of their foreign exchange reserves.  They made it quite clear that this did not mean a dumping of US dollars, but instead, they will be using their reserves to buy “strategic resources” more aggressively. In the past China has said that they might use the surplus foreign exchange reserves to buy precious metals and base metals. Foreign exchange reserve diversification is a very sensitive issue which could destabilize the global economy if the process picks up speed. Every country is gradually diversifying its foreign reserves into more productive purposes away from the US dollar but the effect will felt over a period of time and not immediately.   OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher. Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4%, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data. Members of the Organization of Petroleum Exporting Countries last sold Treasuries for three straight months in June 2003. Oil producers have surpassed Asian central banks as the largest pool of global savings, accumulating an estimated $500 billion in 2006 alone, according to research by Pacific Investment Management Co. The sales during those three months mark a reversal because OPEC countries have boosted their holdings of U.S. government bonds by 70% to $97 billion in the past 17 months. On one hand the demand US dollar could rise if treasury yields rise while on the other hand the lack of demand for US government bonds could negatively affect the greenback.
GOLD -- FEBRUARY FUTURE
Gold needs to break $643.60 for $655. On the lower side as long as $620.0 holds on closing basis the downside is limited.
SILVER -- MARCH FUTURE
Silver needs to break $1325 for $1400 On the lower side $1272, $1252 and $1222 are the support levels.
Happy Profitable Trading
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-- Posted Tuesday, 23 January 2007 | Digg This Article

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