-- Posted Friday, 16 March 2007 | Digg This Article

GOLD	SILVER
COMEX GOLD APRIL FUTURE -- $647.40	COMEX SILVER MAY FUTURE -- $1309.00
EXPECTED TRADING RANGE
GOLD -- $643.00 -- $660.00	SILVER -- $1280.0 - $1334.00
GENERAL MARKET CONDITIONS
Copper leads the rally in the metals space on falling LME inventories and a near 113% increase in Chinese demand in the months of January and February.  Copper was also supported by a technical break out and short covering. Additional capacities for copper will come only in the third quarter of 2007 till then copper will rise further. The increase in Chinese demand was to Chinese New Year celebrations in the middle of February. The increase in demand was due to cyclical factors which increased speculative interest. Current copper prices has a minimum of 20% speculative premium which could increase to 30%. Only if copper prices rises into April that I will be convinced that comex copper near dated future could test $400 else the rise is just a selling opportunity.    Russia and US could be headed back to the cold war era after Russia said that it will take ``military measures'' to counter the U.S. plan to install a missile- defense system in Central Europe and the Caucasus. US is trying to build military presence with former friends of ex Soviet Union which is not liked by the Russians. Russian President Vladimir Putin had told a defense conference in Munich Feb. 10 the missile shield would ``completely neutralize'' the deterrent threat posed by Russia's own nuclear missiles. ``There will be no more balance of power,'' he said, adding that Russia will aim to produce weapons of its own to ``overcome'' such arms systems. As Russian economy grows its dependence on international aid will also reduce. Any reduction in dependence on international aid will result in resurfacing of the military ambitions of the Russian and a situation similar to the cold war. It may take a few years for these things to happen, but one needs to keep a close watch on the developments. At the moment the whole world is focused on terrorism and the US president George Bush’s doctrine of terrorism and Middle East. Once Iran and North Korea issues are resolved in which ever fashion, will the geopolitical risk subside. I do not think some thing other will be come up. Towards the close of 2008 we have the US presidential elections. The republicans suffered humiliating defeat in state elections last year due to Iraq war and US economy. Mr. Bush will start from this year to ensure a republican victory which could include changes in Iran, Iraq and Middle East strategy.  Gold and silver could benefit immensely from the uncertainty created by the above mentioned geopolitical risk.   Gold and silver are new driven supported by rising base metal prices. Investor cautiousness still persists. Gold and silver will benefit from uncertainties be it Iran, US mortgage, the Fed meeting next week or weaker US dollar.  Major powers announced an agreement yesterday to impose new U.N. arms and financial sanctions on Iran for its nuclear program. It seems the Bush administration is trying to buy out sub prime probes so the investor confidence on US financial markets do not fall.
GOLD -- APRIL FUTURE
Gold is in a familiar $640 - $660 zone and only a break of $660 will result in further gains to $672. On the lower side as long as $635.10 holds, downside limited.
SILVER -- MAY  FUTURE
Silver needs to break $1330 for $1370 and $1412. On the lower side as long as $1268 holds on closing basis downside limited.
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 Friday, 16 March 2007 | Digg This Article

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