Iranian risk is till there as Iran continues to enrich uranium. Iran has speeded up its nuclear programme and plans to complete a large-scale uranium enrichment facility by May. By that time, according to a long-awaited report by the International Atomic Energy Agency, Iran plans to install and start using 3,000 centrifuges to enrich uranium, despite UN demands that it suspend uranium enrichment related activities. If they functioned smoothly, the 3,000 centrifuges, organised into “cascades” of 164 machines apiece could produce sufficient highly enriched uranium for a nuclear bomb within a year. Iran could take between six months and a year to install and operate 3,000 centrifuges. There is no clear time period within which Iran will able to build nuclear weapon. There is a difference between Uranium enrichment and producing nuclear weapons. Global leaders are trying to stop Iran from building nuclear weapons. Uranium is just a fuel for nuclear weapons. In 2006 Iranian risk and hurricane risk in the Gulf of Mexico kept traders on the edge and crude oil prices fell like a pack of cards in January, 2007 on warmer winter in US. This factor will continue into 2007.
In India, yesterday there was virtually zero demand for gold and silver. A small trader who on an average sold 15 kilograms of gold every day over the past few years was not able to sell a single kilogram of gold yesterday.This was felt in New Delhi, Mumbai, Kolkatta, Bangalore, Ahmedabad and other parts of India. There was some sporadic scrap sales. Silver, physical was not available in Bangalore and other parts of South India. In South India, retail investors have invested in physical silver on expectations that silver prices will reach INR 23,000-INR 24,000 over the next few months. There is not doubt that silver is more bullish than gold in 2007 and will fetch a higher return on investment than gold.
Gold and silver fell on profit taking even as crude oil floats over $60.00 a barrel. There is still some nervousness over gold’s 2007 fifteen percent rise and traders are booking profits at higher levels. Gold has just risen 2.00% this week and concerns over sudden gold rise and Japanese money is baseless. Copper rose 4.00% yesterday only. This week’s volatility in gold and silver is just a trailer of things to come in the rest of 2007.Coping with volatility will be the key for ensuring positive returns in gold and silver for day traders and jobbers. A trader in India had sold comex gold April future at $663.00 on Wednesday and he exited at $683.00 yesterday and made $20 loss. This trader exits at $5 a trade when he gets profits. The general investor trading style in India is that they will see s loss of $30 to $35 in gold and when the same trade becomes profitable they will exit with minor profits whereas had they not exited they would have made a higher profit. This style of trading helps only the exchange and the bucketer/Dibba company.
GOLD -- APRIL FUTURE
Gold needs to break $685 - $690 zone for further gains. On the lower side $671.50 and $659.00 are the support levels.
SILVER -- MARCH FUTURE
Silver needs to break $1440 - $1450 zone for $1500. On the lower side support is at $1405, and $1360.
Happy Profitable Trading & A Great weekend
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