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-- Posted Monday, 5 March 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $644.20	COMEX SILVER MAY FUTURE -- $1291.50
EXPECTED TRADING RANGE
GOLD -- $624.00 -- $666.00	SILVER -- $1255.0 - $1358.00
COPPER AND CRUDE OIL -- EXPECTED TRADING RANGE
COPPER MAY  -- $261.20.00 - $277.60	NYMEX CRUDE OIL  MARCH   - $58.80 - $62.60
GENERAL MARKET CONDITIONS
The first sixty days of 2007 has been a roller coaster ride. In January crude and base metals were knocked out. In last week of February it was the turn of gold, silver and global equities with the fall in Chinese stocks and yen carry trade being made the scapegoat. If there is more and free money flowing in the world investors are bound to take higher risk which results in a bubble like situation. The bubble bursts when money supply falls. This is the prime reason for last weeks fall in precious metals and equities. It is very difficult to predict the timing of bursting of such bubbles, but early warning signals are always there. If gold and silver fall continuously into this week, then only the bubble will burst, else last week’s fall was just profit taking and nothing else and another buying opportunity. One should wait for a bottom and buy for the long term. I will be tempted to buy far dated call options if there is a five percent decline.     There is one thing that I would like to clarify to the readers of this report. Please use trailing stop losses on all open positions. Financial markets have a tendency to overshoot as well as undershoot. Sometimes momentum defies all technical factors as well fundamental factors. There are times when stop losses are not hit as the next is above or below the stop loss. In such a situation one has to exit at market price to limit losses. Last week in gold and silver prices fell is such a way that many stop losses were not hit. In such a situation exiting at market prices on long positions would have been wise decision. Profit making opportunities will always be there. But slide like last week can erode entire years profits, if exposure is high. One should also keep on booking partial profits on his open positions so that cost of stop losses (if any) for the balance is quickly recovered. I have a client of mine in Coimbatore who was long in MCX gold April at INR 9150 but did not book all his profits when prices rose to INR 9850. At the current prices he is getting marginal profits as compared to what would have got at INR 9800+.   Any sustained fall in global equity markets will reduce global growth in 2007. Equity markets are also one of the key drivers of growth. Higher return from equities results in higher spending and investments which pushes up the prices.  Base metals prices could face downward pressure if there are any hints of slower growth in 2007. In India there is a gradual shift in investor preference from equities to commodity markets. There are a large number of investors who have made handsome profits in equity future but their profits were offset by losses in derivative markets. Do not keep all eggs in one basket. One investment portfolio should be diversified.
GOLD -- APRIL FUTURE
Gold needs to hold $624.20 on closing basis to prevent further losses to $613.00.  Initial support is at $639.10 and $631.10. Resistance at $651.40 and $659.0
SILVER -- MAY  FUTURE
Silver needs to close over $1310 for further gains to $1412 and $1450. On the lower side $1255 and 1183 are the key support levels.
Happy Profitable Trading
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 Monday, 5 March 2007 | Digg This Article

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